What does DTI mean?

DTI stands for Debt-to-Income ratio, which is a financial metric used to assess an individual's ability to manage monthly debt payments relative to their gross income. It is calculated by dividing total monthly debt payments by gross monthly income, expressed as a percentage. A lower DTI indicates a healthier financial situation, often making it easier to qualify for loans or mortgages. Lenders use DTI to evaluate creditworthiness and financial risk.