Lenders often determine an individual\u2019s creditworthiness by looking at that person\u2019s debt-to-income ratio. If the ratio is considered acceptable, it\u2019s more likely that lenders will make the loan. Calculating the ratio can provide insight into the state of your financial health. Here\u2019s how to calculate your ratio.<\/p>\n\n\n\n
Start by adding up all of your monthly debt obligations \u2014 mortgage, auto, and other loan payments, as well as minimum credit card payments. Next, divide that amount by your gross monthly income. That\u2019s the amount of money you earn before taxes and other deductions are taken. Income generally includes your pay, investment income, and self-employment income.<\/p>\n\n\n\n
If you multiply the ratio by 100, you\u2019ll get the ratio as a percentage. If your ratio seems high, it may be time for you to take some action to lower it. Paying down credit cards or other debt is a good starting point.<\/p>\n","protected":false},"excerpt":{"rendered":"
Lenders often determine an individual\u2019s creditworthiness by looking at that person\u2019s debt-to-income ratio. If the ratio is considered acceptable, it\u2019s more likely that lenders will make the loan. Calculating the ratio can provide insight into the state of your financial health. Here\u2019s how to calculate your ratio. Start by adding up all of your monthly … <\/p>\n