 TITLE: What Is Debt-to-Income Ratio and How Do I Calculate It? CONTENT: How Is Debt-to-Income Ratio Calculated?\n---------------------------------------\nTo calculate your debt-to-income ratio, establish what your total monthly debt obligation is and divide that figure by your gross monthly income.\nFor example, if each month you pay $1,000 for your mortgage payment, $250 for your auto loan, $100 for your student loan and $200 for various other debt, your total monthly debt obligation—the sum of all your monthly payments—is $1,550.\nTo calculate your gross monthly income, take your salary before taxes and other deductions, and divide it by 12. So if your annual salary is $60,000, your gross monthly income would be $5,000.\nNow take your total monthly debt obligations ($1,550) and divide them by your gross monthly salary ($5,000). Then convert the resulting number (0.31) into a percentage by multiplying it by 100; in this case, 31% is your DTI.\nIf you're buying a house and applying for a mortgage loan, the lender will use the calculations above to calculate your back-end DTI, but will also consider your front-end DTI. To calculate that, simply divide the mortgage payment ($1,000) by your gross monthly income ($5,000), and you'll get 0.20, or 20%. END