DEBT TO INCOME RATIO

Step one: Add up your total monthly installments (excluding mortgage)

Example:
Car payment 265.00
Retail credit card 50.00
Major credit card 75.00
TOTAL MONTHLY PAYMENTS 390.00

Step two: Divide the total by your total net pay (take home/after taxes)

Example:
390.00 ÷ 2500.00 = 15.6%
Total monthly payments Net take home Debt to Income Ratio

The result is YOUR Debt to Income Ratio

• UNDER 15% = Relax
• 15% - 20% = Be Cautious
• OVER = Danger