# How To Figure Debt To Income Ratio Calculator

There is a debt-to-income calculator that quickly and accurately takes in to account the person’s annual income and monthly debts that would be to determine the person’s debt-to-income ratio. Lenders look at this ratio when they are trying to decide whether to lend you money or extend credit. A low DTI shows you have a good balance between debt and income. As you might guess, lenders like this number to be low — generally you’ll want to keep it below 36, but the lower it is, the greater the chance you will be able to get the loans or credit you seek.

When you see the calculator, it would be able to display the person’s likely eligibility that would be used in getting a mortgage. This mortgage is going to be based on your debt-to-income ratio.

The calculator is known to assume that the person only have one mortgage. Also it means that the person’s current housing expenses will be applied when a new home is about to be bought.

Your debt-to-income ratio can be a valuable number — some say as important as your credit score. It’s exactly what it sounds: the amount of debt you have as compared to your overall income.

#### Car loan payments

This is the sum of any monthly car payments that you pay each month as part of a lease and/or financed car payment.

Add up all of your monthly debt obligations — often called recurring debt — including your mortgage (principal, interest, taxes and insurance) and home equity loan payments, car loans, student loans, your minimum monthly payments on any credit card debt, and any other loans that you might have.

#### Minimum credit card payments

This is the sum of minimum credit card payments that you pay each month. Do not include credit card balances that you pay off in full each month.

#### Mortgage/rent payments

This is the sum of any house payments (rent or mortgage) other than the new mortgage you are seeking.

Some people can measure their ratio when they compare all their housing debts including their home insurance, mortgage expenses, taxes and other house related expenditures. When this is done, it can be calculated and divided by the gross monthly income.

The debt to income ratio is simply a person’s finance measure that is able to compare the money that the person has earned to the amount of money that he owns his creditors.