banks use debit-to-income ratios in order to:
A. decide whether they need to look at a borrower's credit history before making a loan.
B. see how often a borrower has missed payments on other loans in the past.
C. see how much money a borrower earns compared to how much he or she has borrowed.
D. analyze the value of a borrowers home and cars to be used as collateral for a loan.

C. It is a ratio of earnings versus expenses.

The lower your DTI, the better. In most cases, you’ll need a DTI of 50% or less, but the specific requirement depends on the type of mortgage you’re applying for.

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Lanuel Lanuel · Answer 2 · 2022-04-28T12:54:18+02:00

Banks use debit-to-income ratios in order to: C. see how much money a borrower earns compared to how much he or she has borrowed.

What is a loan?

A loan refers to an amount of money that is being borrowed from a bank or other financial institutions (lender) by a borrower, and it is generally expected to be paid back to the lender at an agreed date with interest.

Generally, a financial institution such as a bank that is lending out an amount of money to a borrower, usually make use of debit-to-income ratios in order to determine how much money a borrower earns with respect to how much he or she has borrowed.

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