Monthly Financial Summary:
Total Monthly Debt: $0
Gross Monthly Income: $0
Lenders typically prefer a ratio below 36%.
function calculateDTI() {
// Get values
var income = parseFloat(document.getElementById('dtiIncome').value) || 0;
var rent = parseFloat(document.getElementById('dtiRent').value) || 0;
var car = parseFloat(document.getElementById('dtiCar').value) || 0;
var student = parseFloat(document.getElementById('dtiStudent').value) || 0;
var cards = parseFloat(document.getElementById('dtiCards').value) || 0;
var other = parseFloat(document.getElementById('dtiOther').value) || 0;
// Validation
if (income <= 0) {
alert("Please enter a valid Gross Monthly Income greater than 0.");
return;
}
// Calculations
var totalDebt = rent + car + student + cards + other;
var ratio = (totalDebt / income) * 100;
var ratioFormatted = ratio.toFixed(2);
// DOM Elements
var resultContainer = document.getElementById('dtiResult');
var valueDisplay = document.getElementById('dtiValue');
var msgDisplay = document.getElementById('dtiMessage');
var debtDisplay = document.getElementById('totalDebtDisplay');
var incomeDisplay = document.getElementById('grossIncomeDisplay');
// Logic for Status
var statusClass = "";
var statusText = "";
if (ratio 35 && ratio 43 && ratio <= 50) {
statusClass = "status-bad";
statusText = "High Risk (Difficult for Loans)";
} else {
statusClass = "status-bad";
statusText = "Critical (Action Needed)";
}
// Update UI
valueDisplay.innerHTML = ratioFormatted + "%";
msgDisplay.className = "dti-status " + statusClass;
msgDisplay.innerHTML = statusText;
debtDisplay.innerHTML = "$" + totalDebt.toLocaleString();
incomeDisplay.innerHTML = "$" + income.toLocaleString();
resultContainer.style.display = "block";
}
Understanding Your Debt-to-Income (DTI) Ratio
Your Debt-to-Income (DTI) ratio is a critical financial metric used by lenders to assess your ability to repay borrowed money. It represents the percentage of your gross monthly income that goes toward paying debts.
When you apply for a mortgage, personal loan, or auto financing, lenders want to ensure you aren't overleveraged. A low DTI demonstrates a good balance between debt and income.
Mortgage Approval: Most lenders prefer a DTI ratio lower than 36%, with no more than 28% going towards rent or mortgage.
Qualified Mortgages: generally, 43% is the highest DTI ratio a borrower can have and still get a Qualified Mortgage.
Interest Rates: A lower DTI can often qualify you for better interest rates, saving you thousands over the life of a loan.
Interpreting Your Results
Our DTI calculator categorizes your financial health into three main zones:
1. 35% or Less: The Healthy Zone
You have debt that is manageable relative to your income. Lenders view you as a low-risk borrower. You likely have money left over for savings and investments.
2. 36% to 43%: The Caution Zone
You may still be approved for loans, but you might face stricter terms. Lenders may worry that adding a new payment could stress your budget.
3. 44% or Higher: The High-Risk Zone
At this level, you may struggle to find lenders willing to approve a mortgage. It is highly recommended to pay down existing debt or increase your income before applying for new credit.
How to Lower Your DTI Ratio
If your calculation shows a high percentage, consider these strategies:
Increase Monthly Payments: Pay more than the minimum on your credit cards to reduce the principal faster.
Avoid New Debt: Do not open new credit lines or take out personal loans before a major purchase like a house.
Recalculate Income: Ensure you are including all sources of income, such as bonuses, alimony, or freelance work, to improve the ratio.
{
"@context": "https://schema.org",
"@type": "FAQPage",
"mainEntity": [{
"@type": "Question",
"name": "What is a good Debt-to-Income ratio?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Generally, a DTI ratio of 36% or less is considered good. Lenders typically prefer that no more than 28% of your income goes towards housing expenses and no more than 36% towards total debt."
}
}, {
"@type": "Question",
"name": "Does DTI include utilities and groceries?",
"acceptedAnswer": {
"@type": "Answer",
"text": "No. Your Debt-to-Income ratio only includes monthly debt obligations like mortgages, rent, car loans, student loans, and credit card minimum payments. Living expenses like food, utilities, and entertainment are not included."
}
}, {
"@type": "Question",
"name": "What is the maximum DTI for a mortgage?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Most conventional loans require a DTI of 43% or lower. However, FHA loans may sometimes accept ratios up to 50% or higher with compensating factors like significant cash reserves or a high credit score."
}
}]
}