What Is Your Debt To Income Ratio And Why Is It Important?

The debt-to-income ratio is a significant determinant for lenders in the mortgage qualification process, it is one of the more meaningful measures of leverage in the real estate industry, and it represents one the top advantages of owning single-family rentals.

This blog post will help you understand what exactly this ratio measures, how to do the calculation, and what an acceptable range looks like. Additionally, and perhaps most importantly, this post will explain how you can use the debt-to-income ratio - leverage - to your advantage as a real estate investor.

Broadly, the debt-to-income ratio is a comparison of total monthly debt payments, and your gross monthly income from all sources.