function calculateDTI() {
// 1. Get input values using specific IDs
var incomeInput = document.getElementById('dti_gross_income').value;
var housingInput = document.getElementById('dti_housing').value;
var carInput = document.getElementById('dti_car_loans').value;
var studentInput = document.getElementById('dti_student_loans').value;
var cardInput = document.getElementById('dti_credit_cards').value;
var otherInput = document.getElementById('dti_other_debt').value;
// 2. Parse values to floats, default to 0 if empty
var income = parseFloat(incomeInput) || 0;
var housing = parseFloat(housingInput) || 0;
var car = parseFloat(carInput) || 0;
var student = parseFloat(studentInput) || 0;
var cards = parseFloat(cardInput) || 0;
var other = parseFloat(otherInput) || 0;
// 3. Validation: Income must be greater than 0 to avoid division by zero
if (income <= 0) {
alert("Please enter a valid Monthly Gross Income greater than zero.");
return;
}
// 4. Calculate Total Debt
var totalDebt = housing + car + student + cards + other;
// 5. Calculate Ratio
var dtiRatio = (totalDebt / income) * 100;
// 6. Round to 2 decimal places
dtiRatio = Math.round(dtiRatio * 100) / 100;
// 7. Determine Status and Colors
var statusBadge = document.getElementById('status_badge');
var resultArea = document.getElementById('result-area');
var analysisText = document.getElementById('analysis_text');
var message = "";
var bgColor = "";
if (dtiRatio < 36) {
message = "Excellent";
bgColor = "#28a745"; // Green
analysisText.innerHTML = "Great job! Your DTI is below 36%. Most lenders view you as a low-risk borrower. You are in a strong position to apply for mortgages or other loans.";
} else if (dtiRatio >= 36 && dtiRatio <= 43) {
message = "Manageable";
bgColor = "#ffc107"; // Yellow/Orange
statusBadge.style.color = "#333"; // Dark text for contrast
analysisText.innerHTML = "Okay. Your DTI is between 36% and 43%. While you can still qualify for many loans, some lenders might require stricter terms. Consider paying down some debt before taking on more.";
} else if (dtiRatio > 43 && dtiRatio <= 50) {
message = "High Risk";
bgColor = "#fd7e14"; // Orange
analysisText.innerHTML = "Caution. Your DTI is getting high. Many mortgage lenders cap their approval at 43%. You may face higher interest rates or rejection for standard loans.";
} else {
message = "Critical";
bgColor = "#dc3545"; // Red
analysisText.innerHTML = "Action Needed. With a DTI over 50%, you have more debt than most lenders are comfortable with. Focus aggressively on debt repayment or increasing income before applying for new credit.";
}
// 8. Update DOM elements
resultArea.style.display = "block";
resultArea.style.backgroundColor = "rgba(0,0,0,0.02)";
document.getElementById('display_percentage').innerText = dtiRatio + "%";
statusBadge.innerText = message;
statusBadge.style.backgroundColor = bgColor;
if(dtiRatio 43) {
statusBadge.style.color = "white";
}
// Format currency for breakdown
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('display_income').innerText = formatter.format(income);
document.getElementById('display_debt').innerText = formatter.format(totalDebt);
document.getElementById('display_remaining').innerText = formatter.format(income – totalDebt);
}
Understanding Your Debt-to-Income (DTI) Ratio
Your Debt-to-Income (DTI) ratio is one of the most critical metrics lenders use to assess your financial health. Unlike your credit score, which measures your history of paying bills, the DTI ratio measures your capacity to repay new debt based on your current income and obligations.
The Golden Rule: Most financial experts and mortgage lenders suggest keeping your DTI ratio below 36% for optimal financial health and borrowing power.
How is DTI Calculated?
The formula for calculating your DTI is relatively simple, yet it holds significant weight in loan underwriting. It is calculated by dividing your total recurring monthly debt payments by your gross monthly income (income before taxes and deductions).
The Formula: (Total Monthly Debt Payments / Gross Monthly Income) x 100 = DTI %
For example, if you earn $6,000 a month before taxes and your total debt obligations (rent, car loan, credit cards) equal $2,000, your DTI is 33%.
What Debts Are Included?
When using the DTI calculator above, it is important to include the correct figures to get an accurate result. Lenders typically look at the "Back-End Ratio," which includes:
Housing Costs: Monthly rent or mortgage principal, interest, taxes, and insurance (PITI).
Auto Loans: Monthly lease or loan payments.
Student Loans: Required monthly minimum payments.
Credit Cards: The minimum monthly payment due (not the total balance).
Other Debts: Personal loans, alimony, or child support payments.
Note: Generally, monthly expenses like groceries, utilities, and gas are not included in the DTI calculation.
DTI Ratio Tiers: What Do They Mean?
35% or less: You are viewed as a safe borrower. You likely have money left over for savings and investments after paying bills.
36% to 43%: You are in the "manageable" range. You can likely get approved for a mortgage (especially a Qualified Mortgage), but your budget might be tighter.
44% to 49%: You are entering the high-risk zone. You may find it difficult to get approved for standard loans without a co-signer or higher interest rates.
50% or higher: This is considered critical. A majority of your income is going toward debt. Lenders will view this as a high default risk.
How to Lower Your DTI Ratio
If your result from the calculator above was higher than you'd like, there are two primary levers you can pull to improve it:
Reduce Debt: The most effective method is to pay off loans. Use the "Snowball" or "Avalanche" method to eliminate monthly obligations. Note that paying down a credit card balance helps, but eliminating a monthly car payment entirely has a massive impact on DTI.
Increase Income: Since DTI is a ratio, increasing the denominator (your income) helps. This could mean a salary negotiation, a side hustle, or including a spouse's income on a joint application.