Can I afford this property? What is my DTI (Debt-to-Income Ratio)
In order to rent one of our properties, we ask that our tenants have a Debt-to-Income Ratio (DTI) of at least 40%. This means that the amount of your monthly household debt (credit cards, auto loans, and other monthly payment plans) is 40% of your monthly income. To calculate this, please use the form below (left) using the instructions and example (right). Please note: None of this information is saved or used for any application and we will never see this information. This is only for your consideration.
- Figure out how much your household made in the last 12 months by referencing your W2, tax forms, pay stubs, etc. (Make sure you are using your gross income i.e. income before taxes, insurance benefits, etc.) Enter this number into the “Annual Income”. Once entered, you will see your “Gross Monthly Income”
- Add up your monthly debt payments. Debt payments include anything you are making payments on: minimum payments on credit cards, car loans/leases, student loans, child support, etc. (Debt payments do not include utilities, cell phone, cable, internet, medical bills, etc. as these will not show up on your credit report.) Enter monthly payments into the corresponding boxes.
- After entering monthly payments into the corresponding boxes, you will see your total monthly payments in the box labeled “Monthly Debt Payments” and your current DTI in the box labeled “Debt to Income (DTI) Ratio”.
- Enter the monthly payment for the rental you are considering. This will then calculate your DTI if you decide to rent this home and take on the monthly payment. This final DTI calculation will be shown in the box labeled “Final Debt to Income (DTI) Ratio”.
Example:
- 1st annual income = $45,000/year
- 2nd annual income = $51,000/year
- Total annual income = $96,000/year
- This will give you a gross monthly income of $8,000/month
- 1st car payment: $200/month
- 2nd car payment: $300/month
- Credit card minimum total: $300/month
- Student Loan payment: $350/month
- Other payments: $100/month
- Total monthly payments: $1,250
- Total DTI viewed in Box “Debt to Income (DTI) Ratio” is 15.6%
- Monthly payment for home you’re considering: $2,000
- Final DTI: 40.1%
Do I have enough credit to rent this house/unit?
- In the last 24 months, have I been more than 30 days late on a mortgage or rent payment? If it’s not on the credit report, we will call your old landlord for verification of rent (VOR).
- In the last 24 months, have I been more than 30 days late on an auto loan?
- We may ask for old, canceled check stubs to verify income
- We look for 2 years steady employment, preferably with the same company or the same field. We will call and verify your employment (VOE).