Home Buying Terminology - Debt-to-Income Ratio

An A-to-Z review of common terms you'll encounter during the home buying process.

Debt-to-Income Ratio -- Also known as debt-to-earnings ratio, this ratio compares how much you make to how much you owe. In other words, it compares your total income (salary and other revenues) to your total debt (credit cards, current loans, etc.).

Mortgage lenders use your debt-to-income ratio to help determine your credit worthiness. In fact, your debt-to-income ratio and your credit score are normally the top two criteria considered by mortgage lenders.

Learn more

• Calculating debt-to-income ratios (About.com)


• How to calculate debt-to-income (eHow.com)

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