How do I calculate my debt service ratio?

You have to figure out your gross monthly income and this is perhaps the very first step while calculating your debt ratio. This gross monthly income should be devoid of your taxes and other deductions. The following are some of the essential factors that you can remember while minding your debt ratio:

If you get the payment every week, then you have to calculate your monthly income as one paycheck times 2.17.

The amount that you get as alimony and the amount that you receive as child car should also be included as your income. This would enable you to have a proper record of all the incomes that you have from various sources

Your gross income also includes conventional averages of bonuses, commissions and tips.

Don’t overlook dividends and interest earnings and never forget to calculate them as your income sources.

You may also take account of miscellaneous profits such as government benefits and/or help.

The very next step after you calculate all your income is to make a payment list of all your expenses. This should of course exclude the mortgage and inclusive of student loan payments, other loans/credit lines, car payments, installment loan payments on fittings and machines, bank/credit union loans, all least amount of credit card payments and payments for past health check care.

So your Debt Ratio can be calculated thus:

Monthly Gross Income / Total Debt Payments = Debt Ratio