Debt-to-income (DTI) ratio is a measure of personal finance which compares an individual's net income with their overall debts owed. Debts can include mortgage loans, student loans, credit card loans, and any other recurring loans.
The debt-to-income ratio is important because it is one of the methods by which lenders will qualify a borrower for a mortgage loan. Any debt-to-income ratio over 43% will indicate to a lending institution that the borrower is overburdened by their current debt, and may not be able to comfortably support another loan.
DTI can be calculated through a very simple calculation - by dividing total recurring monthly debt by gross monthly income. It is expressed as a percentage.