Part of The duty
With certain exceptions, Regulation Z requires creditors to make a reasonable, good-faith determination of a consumer's ability to repay any residential mortgage loan.
The factors
The creditor must consider your current or reasonably expected income or assets other than the home, your employment status if it relies on employment income, the payment on the loan, any simultaneous loan, mortgage-related obligations, your current debt obligations, alimony and child support, your DTI or residual income, and your credit history.
How DTI is defined there
Total monthly debt obligations are the payment on the new loan, simultaneous loans, mortgage-related obligations and current debt obligations, alimony and child support. Total monthly income is your current or reasonably expected income, including income from assets. The ratio is the first divided by the second.
Residual income
Instead of the ratio, or as well, the creditor may consider what remains after subtracting total monthly debt obligations from total monthly income.
No fixed ratio
The official commentary says the rule does not prescribe a specific monthly debt-to-income ratio with which creditors must comply. A creditor may also consider other factors, such as assets other than the home.