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What are the different types of DTI ratios?

Mortgage lenders consider two types of DTI ratios — the front end and the back end. Front-end DTI is your future monthly mortgage payment — including property taxes, home insurance and mortgage insurance — divided by your monthly gross income.

What is a good DTI ratio for a mortgage?

You shouldn’t have trouble qualifying for a loan or line of credit. DTI from 36% to 41%: A DTI ratio in this range indicates to lenders that you have a manageable level of debt and earn enough income to cover a new mortgage payment. Lenders are more likely to approve loans for borrowers with DTIs in this range.

Is DTI a front or back end ratio?

Keep in mind: In common parlance, DTI ratio often refers specifically to the back-end ratio, but both front- and back-end ratios are often factored in when a lender considers borrower’s debt-to-income ratio for a mortgage. What is a good debt-to-income ratio?

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