If you’ve never heard of the term “debt-to-income ratio” (DTI), then you should learn a little bit more about this important financial term. It is used by mortgage companies to see if you should be eligible for a loan or how much your loan can be for. In order to get approved for the mortgage that you want, be sure you have your DTI as positive as possible to get the best mortgage terms.
How to Improve Your DTI
There are several different ways that you can improve your DTI, but the best way is to increase your income. While that seems simple, it can be challenging to just wake up and decide to make more money.
You can also decrease your debt, or do both at the same time – which of course is the optimal example.
- Increase your salary by looking for new positions and opportunities both at your work and at other organizations
- Work at home by being an independent consultant – but be sure you’re not interfering with your day job.
- If you live near popular destinations, rent out your parking spot! Walking just a little farther can net you additional income.
- Freelance writing is a growing field. With the rise of content marketing there is more need for words than ever before.
- Tutoring is another great way to make money and help out children (or adults!) in your community at the same time.
- Ever thought of house sitting or pet sitting? These are both great ways to get a little extra income on the weekend and throughout the week without a lot of extra work.
- Lift and Uber are changing the way people think of moving from destination to destination. These non-taxi taxi drivers can make a significant amount of extra income in large cities.
- Business people today are incredibly busy. Find personal assisting jobs online; certification can be available to get more pay.
- Translation is a huge need these days as well, and if you have language skills you can receive a premium amount of money for your knowledge.
- Start a social media consulting business – you can earn extra money and these jobs are generally quite fun to do.
Reducing your debt is also an important part of improving your DTI ratio, and one that you should focus on going forward. There are many different ways to achieve this. One way is to apply for a personal consolidation loan, you can always examine a couple of different sites online. After you have reduced your debts, get ready for that great mortgage rate coming your way!
