How to Find Out My Debt to Income

Your debt to income ratio is a calculation used by lending institutions to determine your ability to pay off new debts each month. It evaluates your current debt vs. your current income. The lower the ratio, the more likely you are to be able to afford new debt. For example, a mortgage company might require you to have a 30 percent or less debt to income ratio before your new loan and a 50 percent or less debt to income ratio after your new loan.

Instructions

1

Add up all of your current monthly debt payments. This includes all of your minimum payments for credit cards, mortgages, car loans, student loans and alimony or child support. Any monthly payment that is considered debt is included.

2

Add up all of your pre-tax income. If you are salaried, simply divide your yearly salary by 12. If you are an hourly employee, multiply your average weekly hours by 52. Divide that number by 12 to find out your average hours per month. Then, multiply that sum by your hourly wage to find out your pre-tax income per month.

3

Divide your total from Step 1 into your total from Step 2 to find out your debt to income ratio.