UNDERWRITING GLOSSARY
DTI
Debt-to-Income Ratio
Required debt payments divided by gross income, commonly used in consumer underwriting.
What does DTI mean?
Required debt payments divided by gross income, commonly used in consumer underwriting. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
DTI in context
$2,000 monthly debt payments on $8,000 gross income equal 25% DTI.
Why it matters in financing
DTI can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related underwriting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.