Tip 2: How to calculate your Debt-to-Income Ratio (DTI)?

Debt-to-Income Ratio (Bottom)
Calculated by dividing the total monthly debt payments by the total gross monthly
income.

Income
Base Income2,617.00
Overtime+
Bonuses+
Commission+
Dividend/Interest+
Subject Property Positive Net Cash Flow (1)+
Net Rent (2)+
Other (Free Form Field)+
Other (Describe Other Income Section)+
Total Monthly Income=$2,617.00
Liabilities 
Primary Housing Expense856.12
Subject Property Negative Net Cash Flow (1)+
All Other Properties (3)+
All Other Payments (4)+60.00
Total Monthly Liabilities=$916.12
Calculation
Total Liabilities*916.12
Total Incomeรท2,617.00
Debt-to-Income Ratio=35.006%

*If the Payment-to-Income Qualifying Ratios are based upon a different
factor such as the Interest Only payment, then the above calculation may not be
correct. Instead, the payment used to qualify the loan divided by the income will
be used.

1 Subject Property Net Cash Flow: This figure is calculated under the “Investment”
button on the Prospect/Borrower Information screen.

2 Net Rent: It is calculated from the Total Net Rent
on Investment properties listed. This number will only be taken into account if the
total net rental income is positive. If it’s a negative figure, please refer to All Other
Properties listed below. Please note that if this is a refinance loan that the 1st
property listed in the REO section will not be calculated into this total.

3 All Other Properties: This figure is calculated from the Real Estate Owned (REO)
section of the loan application. It is calculated from the Total Net Rent
on Investment properties listed. This number will only be taken into account if the
total net rental income is negative. If it’s a positive figure, please refer to Net Rent
above. Please note that if this is a refinance loan that the 1st property listed in the
REO section will not be calculated into this total.

4 All Other Payments: This figure is calculated from the Liabilities section
on page 3 of the loan application. It is calculated by adding the total monthly
payments of all liabilities that will not be paid off with the close of the loan.

Home Loan Brokers