Conventional owner-occupied programs cap DTI around 43–50%. DSCR loans do not use DTI. Front-end DTI is just the housing payment; back-end includes all debts.
Loan Mechanics
DTI (Debt-to-Income Ratio)
Your total monthly debt payments divided by gross monthly income.
More in Loan Mechanics
- DSCR (Debt Service Coverage Ratio)— The ratio of a property's net operating income to its debt payments — a 1.25 DSCR means th…
- LTV (Loan-to-Value)— Loan amount divided by the property's appraised value, expressed as a percent.
- LTC (Loan-to-Cost)— Loan amount divided by total project cost (purchase + rehab).
- ARV (After-Repair Value)— The projected appraised value of a property after planned renovations are complete.
- APR (Annual Percentage Rate)— The all-in yearly cost of a loan, including interest rate plus most fees.
- Note Rate— The interest rate written on your promissory note — what your monthly payment is calculate…