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Debt-To-Income Ratio - What’s typical in todays world?
Posted on 10/24/23 at 2:04 pm
Posted on 10/24/23 at 2:04 pm
We recently purchased a new home (god bless me) and it’s had me digging more into our finances. This new home is moving our DTI ratio just over 20% and it makes me nervous af.
What kind of DTI ratio are y’all comfortable with?
What kind of DTI ratio are y’all comfortable with?
10
Posted on 10/24/23 at 2:27 pm to GeauxTime9
Posted on 10/24/23 at 2:29 pm to GeauxTime9
I mean mine is 24% and I max out roths/401ks/hsas and put like 1000 a month into my brokerage. So 22% sounds like you are freaking out for no reason lol
This post was edited on 10/24/23 at 2:32 pm
Posted on 10/24/23 at 2:38 pm to GeauxTime9
quote:
This new home is moving our DTI ratio just over 20% and it makes me nervous af.
I think you're in the upper echelon. If I had to guess I'd say average DTI is around 50% or more.
This post was edited on 10/24/23 at 2:40 pm
Posted on 10/24/23 at 2:44 pm to jsk020
quote:
sounds like you are freaking out for no reason lol
I may be, this is just new territory. I’ve always lived a frugal life style and hated change haha.
Posted on 10/24/23 at 3:02 pm to GeauxTime9
Just use the government model. Works for them!
I mean no way you are being any kind of serious right now. So go all in.
I mean no way you are being any kind of serious right now. So go all in.
This post was edited on 10/24/23 at 3:09 pm
Posted on 10/24/23 at 3:28 pm to GeauxTime9
Is this just a humble brag thread?
In all seriousness, with the price of most homes and cars these days, I assume most modern homebuyers are running right up to the ~42-45% mark which is the most mortgage lenders will let you exist at.
Couldn't begin to guess for non-homebuyers.
In all seriousness, with the price of most homes and cars these days, I assume most modern homebuyers are running right up to the ~42-45% mark which is the most mortgage lenders will let you exist at.
Couldn't begin to guess for non-homebuyers.
Posted on 10/24/23 at 3:37 pm to GeauxTime9
I think it is a sliding scale. If you make 50k/year with a 20% dti ratio, you would have 40k left over vs if you made 100k/year you would have 80k left over.
I think you should figure out what your basic living expenses are, i.e. food, entertainment, internet, kids, tution, vacations, etc. Also budget some fluff and savings. Say you need 4k/mth for the life which equates to 48k/year. At 50k salary, 20% dti is too much but at 100k, you have 32k in additional debt you can take on.
I think you should figure out what your basic living expenses are, i.e. food, entertainment, internet, kids, tution, vacations, etc. Also budget some fluff and savings. Say you need 4k/mth for the life which equates to 48k/year. At 50k salary, 20% dti is too much but at 100k, you have 32k in additional debt you can take on.
This post was edited on 10/24/23 at 3:45 pm
Posted on 10/24/23 at 4:01 pm to Fe_Mike
Is debt to income
Debt payments or total debt
Debt payments or total debt
Posted on 10/24/23 at 4:30 pm to thelawnwranglers
Payments
Posted on 10/24/23 at 5:05 pm to GeauxTime9
Most apps coming in that I see today are 45-50. I’ve closed some as high as 57.
Posted on 10/24/23 at 5:14 pm to npt817
quote:
Most apps coming in that I see today are 45-50. I’ve closed some as high as 57.
That is scary. I built my forever home 10 years ago in my late 20’s. Scared the shite out of me that my DTI at the time was 28%. But I knew over the next 5-10 years my income would more than double and I would eventually pay both cars off. Today my DTI is around 10%. Could not imagine having a DTI over 30%.
Posted on 10/24/23 at 6:45 pm to GeauxTime9
Are we using gross income or after tax income when determining DTI?
Posted on 10/24/23 at 7:59 pm to GeauxTime9
We’re between 8-12% DTI depending on the year at 2.75% rate and I still hate it. It “doesn’t make sense” to pay it off, but it’s just annoying. 23 more years… 
I would be uncomfortable approaching 20% because that would take away from savings goals.
I would be uncomfortable approaching 20% because that would take away from savings goals.
Posted on 10/25/23 at 12:18 pm to TigerDeBaiter
quote:
It “doesn’t make sense” to pay it off, but it’s just annoying
Baw you ain’t kiddin. Against the advice of damn near everyone, I’m throwing huge amounts of money at my mortgage every month (after fully funding 401k, Roth yadda yadda) because we have a horrible rate and it pisses me off knowing I owe anyone anything. I’m legit trying to pay this 30 year MF off in 5 years.
No other debt than my mortgage and I’m still a pissy little bitch about it.
Posted on 10/25/23 at 12:30 pm to LSUEEAlum
quote:
I built my forever home 10 years ago in my late 20’s
You don’t hear that too often
Posted on 10/25/23 at 12:32 pm to Paul Allen
quote:
You don’t hear that too often
Poor ignorant bastard THINKS it’s his forever home. Little does he know, there’s some woman out there lurking around who has a completely different set of plans haha
Posted on 10/25/23 at 12:49 pm to SouthPlains
Also, it’s certainly possible that a young person will be perfectly happy with a “forever” home situation.
But that’s bold as hell to assume you will be satisfied staying in the same house, in the same location for the next 50-60 years.
But that’s bold as hell to assume you will be satisfied staying in the same house, in the same location for the next 50-60 years.
Posted on 10/25/23 at 12:58 pm to SouthPlains
quote:
Against the advice of damn near everyone, I’m throwing huge amounts of money at my mortgage every month (after fully funding 401k, Roth yadda yadda) because we have a horrible rate and it pisses me off knowing I owe anyone anything.
Nothing wrong with that at all. Don't let others tell you what's important to you.
They may think it's 'wise' to invest that money elsewhere so that it's worth an extra couple hundred K in 30 years when you retire, then you can spend it on a nice '56 Vette or Bertram.
You may think it's wise to spend that money now because you'll sleep better at night and have zero stress during the day for the next 20 years knowing you have absolutely no debt.
Some people want fancy things when they retire. Some people can do without and just want freedom now. Nothing wrong with either person.
Posted on 10/25/23 at 1:22 pm to SouthPlains
quote:Do you mind sharing what this horrible rate is?
because we have a horrible rate
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