Posted on: 29th Oct, 2013 02:39 am
Total Debt Service (TDS) is a standard calculation performed by the mortgage lenders to determine if a borrower qualifies for a specific loan type. It is calculated by dividing the individual's total monthly commitments (that is, the monthly payment of the loan plus any other current commitments) to the individual's gross monthly income and then multiplying by 100. A favorable TDS ratio is 40% and under.
For example, Suppose
Total monthly commitments = $20,000 and
Gross monthly income = $80,000
Therefore,
TDS = ($20,000 / $80,000) * 100
TDS = 25%
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For example, Suppose
Total monthly commitments = $20,000 and
Gross monthly income = $80,000
Therefore,
TDS = ($20,000 / $80,000) * 100
TDS = 25%
Related Article
Thanks for the info, Sam! :)