function calculateDTI() {
// 1. Get Input Values with Validation
var grossIncome = parseFloat(document.getElementById('grossIncome').value);
var housingExp = parseFloat(document.getElementById('housingExp').value);
var carLoans = parseFloat(document.getElementById('carLoans').value);
var studentLoans = parseFloat(document.getElementById('studentLoans').value);
var creditCards = parseFloat(document.getElementById('creditCards').value);
var otherDebt = parseFloat(document.getElementById('otherDebt').value);
// 2. Handle Defaults and Edge Cases
if (isNaN(grossIncome)) grossIncome = 0;
if (isNaN(housingExp)) housingExp = 0;
if (isNaN(carLoans)) carLoans = 0;
if (isNaN(studentLoans)) studentLoans = 0;
if (isNaN(creditCards)) creditCards = 0;
if (isNaN(otherDebt)) otherDebt = 0;
// Prevent division by zero
if (grossIncome === 0) {
alert("Please enter a valid Gross Monthly Income greater than zero.");
return;
}
// 3. Perform Calculations
var totalMonthlyDebt = housingExp + carLoans + studentLoans + creditCards + otherDebt;
// Front-End Ratio = Housing / Gross Income
var frontEndRatio = (housingExp / grossIncome) * 100;
// Back-End Ratio = Total Debt / Gross Income
var backEndRatio = (totalMonthlyDebt / grossIncome) * 100;
// 4. Update UI
document.getElementById('frontEndDTI').innerText = frontEndRatio.toFixed(2) + '%';
document.getElementById('backEndDTI').innerText = backEndRatio.toFixed(2) + '%';
document.getElementById('resultBox').style.display = 'block';
// 5. Determine Status logic (Standard Mortgage Guidelines)
var statusEl = document.getElementById('dtiStatus');
var statusMsg = "";
// Logic: 43% is danger
if (backEndRatio 36 && backEndRatio <= 43) {
statusEl.className = "dti-status status-warning";
statusMsg = "Caution. Your DTI is acceptable but on the higher side.";
} else {
statusEl.className = "dti-status status-danger";
statusMsg = "High Risk. Lenders may find it difficult to approve new credit.";
}
statusEl.innerText = statusMsg;
}
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 ability to manage monthly payments and repay debts. Whether you are applying for a mortgage, an auto loan, or a personal line of credit, your DTI provides a snapshot of your financial health by comparing your monthly debt obligations to your gross monthly income.
What is the Difference Between Front-End and Back-End DTI?
When using a Debt-to-Income Ratio Calculator, you will typically see two different percentages. It is important to understand the distinction:
Front-End Ratio (Housing Ratio): This calculation only considers your projected housing expenses (rent or mortgage principal, interest, taxes, and insurance) divided by your gross income. Lenders typically prefer this to be under 28%.
Back-End Ratio (Total Debt Ratio): This is the more comprehensive figure. It includes your housing costs plus all other monthly recurring debts such as student loans, credit card minimums, and car payments. Most conventional mortgage lenders look for a back-end ratio under 36%, though some programs allow up to 43% or higher.
How to Lower Your DTI Ratio
If the calculator results indicate your DTI is in the "High Risk" zone, consider these strategies to improve your standing before applying for a major loan:
The most effective method is the Snowball or Avalanche method to pay down revolving debt like credit cards, which lowers your minimum monthly obligation. Alternatively, increasing your gross income through a side hustle or salary negotiation will mathematically lower your ratio, even if your debt level remains constant. Avoid taking on new debt obligations, such as financing a new car or furniture, in the months leading up to a mortgage application.
Why Gross Income Matters
Remember that DTI is calculated based on your gross monthly income—that is, the amount you earn before taxes and deductions. If you are self-employed, lenders will typically use the net income average from your last two years of tax returns to determine this figure, rather than your current monthly revenue.