# Questions tagged [debt-to-income-ratio]

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1 vote
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### Why does the debt-to-income ratio not affect credit?

Lenders obviously care about the debt-to-income ratio, since it can influence whether one gets a mortgage or other types of loans. This makes sense: taking on new credit is more of a risk for people ...
• 111
255 views

### How do I compute the adjusted debt-to-equity ratio for a Treasury Stock?

I want to compute the adjusted debt-to-equity ratio. The formula is simple: ADE ratio = Total Liabilities divided by Total Equity and Treasury Stock. When I look for Treasury Stock for MSFT (https://...
• 41
132 views

### Microsoft has a weird adjusted Debt-to-Equity ratio

When I analyse Coca-Cola, in the balanced sheet, they have a row called Treasury Stock. I think it means that the Company buyback their own stock. However, when I analyse Microsoft, they have not ...
• 41
1 vote
291 views

I have read Warren Buffet and the interpretation of financial statement. They explained that an important ratio is the Debt-To-Equity Ratio (Total Liabilities / Total Equity). Sometimes this ratio can ...
• 41
593 views

### Should I sell back a lease early in order to improve Debt-to-Income?

My wife and I just started the process of buying our first home. I've noticed DTI is very important as far as how much home you can get pre-approved for. Knowing this, I have started thinking of ways ...
• 31
423 views

### How is debt to income ratio calculated by mortgage lenders? (what is the source material)

I was thinking about this as I was writing a comment for this question. I wanted to make a point that is the OP paid his credit card in full before each month's statement was generated (so that the ...
• 1,876
981 views

### How do rental income/costs factor into a debt to income ratio for a home purchase?

If I own a house that I rent out, and I apply for a mortgage to purchase a new primary residence, how do the rental income and costs factor into a debt to income (DTI) ratio for that new mortgage? My ...
• 111
1 vote
389 views

### Impact of Spending Cash/Debit vs Credit Card on Debt to Income Ratio

Since debt-to-income ratio (dti) is an important factor in determining one's creditworthiness especially for mortgage rates, it is clear that one should keep the monthly recurring debt and credit card ...
• 125
2k views

### Does a 401(k) loan count as debt when calculating Debt-to-Income Ratio?

Does a regular 401(k) loan count as debt when calculating one's Debt-to-income ratio when applying for a mortgage? The loan is within the organization that manages the 401(k), and it does not show in ...
1 vote
495 views

### Should I avoid reporting expenses on my tax return in order to have a higher income for getting a mortgage?

I'm new to this sort of thing. I want to buy my first house soon (within a year?). As I am filing my taxes right now, should I file with my income but not report expenses, so that my taxable income ...
• 101
4k views

### What's the best way to maintain your credit score after paying off all of your debt?

For several years we have had a mortgage, two car loans, and an active line of credit from our bank. We made payments on all of these religiously and our credit score is now in the high 700s. ...
• 273
1 vote
590 views

I looked up my Fico score for the first time in March of this year--it was 766. At that point, I had two credit cards, one that I used for almost everything and a store card that I hardly ever used. ...
228 views

### Does Debt to Income Ratio include the loan I am applying for?

I did not find an exact answer, so I wanted to double check. From what I understand, the Debt to Income ratio is based on my current monthly debts divided by my monthly income. I was talking with a ...
• 207
9k views

### What is included in 43% debt to income ratio calculation for mortgages?

I'd like to know what items a bank will look at for their debt to income ratio calculation for an application. My only loan right now is a car lease. So I'm specifically wondering if any of these ...
• 181
4k views

### How does DTI work while building a house?

Lenders are pretty consistent and clear about how DTI (debt-to-income ratio) is calculated and the limit of 45% for a traditional mortgage against a primary residence. New construction loans seem to ...
• 2,871
4k views

### Does a 401(k) contribution harm your Debt-to-Income ratio for a mortgage application?

If I contribute to a 401(k) at work, and thus have a lower W-2 income box 1 (Wages, tips, other compensation), will this hurt my debt-to-income (DTI) ratio on a mortgage application? I wouldn't think ...
• 1,823
140 views

### Rate used for approval on a 5/5 ARM?

When applying for a 5/5 ARM with a 2% cap each adjustment, a 6% lifetime cap, that starts out at 2.5%, what rate will the lenders generally use to qualify you for the loan when computing your debt to ...
• 1,823
693 views

### Is this a valid strategy to reduce interest payments for student loans?

I kind of messed up and didn't pay my unsubsidized grad schools loans while I was in school, so I have quite a bit of interest accrued. In total there are 5 loans and they come to about \$100k. All ...
• 153
1 vote
315 views

### Should I avoid credit card use to improve our debt-to-income ratio?

We put all our expenses on a credit card and pay it off every month in order to get maximize our cash back. We never charge more than we have in the checking account, so we always pay it off. Should ...
• 223
1 vote