Key takeaways Your debt-to-income (DTI) ratio represents the percentage of income you have left after making monthly debt payments. Your DTI is a key factor in mortgage approval. Most lenders prefer DTI ratios of 36 percent or below. With a lower DTI, you’re more likely to be approved, and you’ll get a better interest rate. What is a debt-to-income ratio? Your debt-to-income ratio measures the percentage of your gross — or pretax — monthly income that you spend on recurring debt payments. This includes things like mortgage payments, rent payments, child support obligations, outstanding credit card balances and payments on other loans. Your income includes all the money you earn from your job and other sources, such as rental property income and Social Security payments. Types of DTI ratios Lenders typically focus on two kinds of DTI ratios.…