ACCT-102 Lecture Notes - Lecture 1: Homeowner Association, Savings Account
Document Summary
Here"s how to tell if your debt is out of proportion for your income. Keeping your debt at a manageable level is one of the foundations of good financial health. Fortunately, there"s a way to estimate if you have too much debt without waiting until you realize you can"t afford your monthly payments or your credit score starts slipping. Your debt-to-income ratio (dti) is a percentage that compares your monthly debt expenses to your monthly gross income. To calculate your debt-to-income ratio, add up all the payments you make toward your debt in an average month. Next, divide your monthly debt payments by your gross income per month (that"s your income before taxes are deducted). Multiply that number by 100 to get your debt-to-income ratio as a percentage. To calculate your debt-to-income ratio, divide your monthly debt obligations by your monthly gross income.
