What is the meaning of gross monthly income in the context of DTI calculations?

• A. The amount of income after taxes.
• B. The total income before taxes and deductions received in a month.
• C. Only salary from job.
• D. Investment income only.

Answer: (B)

Gross monthly income is the total amount of money you earn in a month before any taxes or other deductions are taken out. In debt-to-income calculations, lenders use this figure because it shows your earnings in a consistent way, before withholdings or benefits affect take-home pay. It can include wages, salaries, bonuses, commissions, overtime, self-employment income, and other regular sources of income, not just salary. The other options describe income after taxes (net income), or a narrow slice of income (only salary or investment income), which don’t capture the full, pre-deduction picture used for evaluating borrowing capacity.