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What is a good debt-to-income ratio?

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Keep your DTI ratio as low as possible to secure the most favorable borrowing terms. 

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Debt-to-income (DTI) ratios probably aren’t something many people think about often. But it’s important not to discount this ratio and the impact it can have on your financial stability. After all, your DTI ratio typically plays a significant role in your ability to access loans – or lack thereof. 

Calculated by dividing your total monthly loan payment obligations by your gross monthly income (income before taxes and deductions), this ratio gives lenders an idea of whether or not you can afford to take on more debt; and if you can, how much risk they accept when they loan money to you. In turn, your DTI ratio plays an important role in whether or not you will qualify for new loans and the interest and payment terms you’ll qualify for if you do. But, what is a good DTI ratio?

Find out how you can pay off your debts now

What is a good debt-to-income ratio?

You’ll typically need a DTI ratio below 43% to qualify for loans with the best terms, according to Money. That said, some lenders may require a lower ratio for loan approvals. That means, if you earn $60,000 per year ($5,000 per month), you shouldn’t have more than $2,150 in monthly loan payment obligations (43% of $5,000). 

But that doesn’t mean you should add debt to your budget until you reach a 43% DTI ratio. The lower this number is the better. Moreover, if your ratio is too high, you should take action to reduce it immediately. You never know when you’ll need a new loan and a high DTI ratio could hamper your chances of approval. 

Have a DTI ratio over 43%? You may qualify for debt relief help here.

What to do if your debt-to-income ratio is too high

A high DTI ratio is a cause for concern because it can limit your borrowing options and lead to strain on your budget. But there are ways to bring your ratio down. Since the ratio compares your total debt to your total income, you could reduce your it by paying off some debt or increasing your income. 

On the other hand, if you have a high DTI ratio, getting ahead of your debts may be easier said than done. After all, a high ratio means a significant portion of your income is already being used to make your minimum payments – leaving little left for extra payments toward principal. If that’s the case for you, it may be time to reach out to a debt relief service

Debt relief services – like debt management and debt forgiveness programs – typically help borrowers by negotiating their interest rates and payment terms or their principal balances with their lenders. Their goal is usually to modify your debts in such a way that you can pay them off in a reasonable amount of time without stretching your budget too thin. And as you pay your debts off, your DTI ratio will fall. 

Why is it important to maintain a good debt-to-income ratio?

There are a few reasons why it’s important to maintain a good DTI ratio, including: 

  • You never know when you will need a loan: You never know when a surprise expense will pop up – and when one does, you may need a loan to cover it. If you maintain a good DTI ratio, you’ll have a higher probability of approval when the need for a loan arises. 
  • Loan terms are typically better for applicants with a good DT ratio: Loan terms are typically better for low risk borrowers than they are for high risk borrowers. Since those with a low DTI ratio have a higher percentage of their income available to pay for new loans, lenders take on less risk when funding those loans than they would if the borrower had a high ratio. So, you’ll likely enjoy access to lower interest rates and more flexible terms when you seek borrowing options. 
  • You’ll be more financially stable with a lower DTI ratio: Having a lower DTI ratio isn’t just to ensure you have access to loans in the future; it can also help improve your financial stability. After all, the higher your ratio, the more of your income you spend on loan payments and less money you have available for saving and investing. By maintaining a low ratio, you will keep some money in your budget free for retirement and other savings.  

The bottom line

If you’re looking for a loan, you’ll likely need a DTI ratio of 43% or lower to qualify for reasonable terms. But, the lower it is, the better. That’s not just the case in terms of your ability to borrow, but also in terms of your financial stability. If your ratio is higher than 35%, it’s likely time to act. Consider contacting a debt relief provider to learn more about your options



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Robert Towne, legendary Hollywood screenwriter of “Chinatown,” dies at 89

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Robert Towne, the Oscar-winning screenplay writer of “Shampoo,” “The Last Detail” and other acclaimed films whose work on “Chinatown” became a model of the art form and helped define the jaded allure of his native Los Angeles, has died. He was 89.

Towne “passed away peacefully surrounded by his loving family” Monday at his home in Los Angeles, his publicist Carri McClure, told CBS News in a statement. She did not provide a cause of death.

In an industry which gave birth to rueful jokes about the writer’s status, Towne for a time held prestige comparable to the actors and directors he worked with. Through his friendships with two of the biggest stars of the 1960s and ’70s, Warren Beatty and Jack Nicholson, he wrote or co-wrote some of the signature films of an era when artists held an unusual level of creative control. The rare “auteur” among screen writers, Towne managed to bring a highly personal and influential vision of Los Angeles onto the screen.

Writer Robert Towne
Writer Robert Towne in audience during the 36th AFI Life Achievement Award tribute to Warren Beatty held at the Kodak Theatre on June 12, 2008 in Hollywood, California. 

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“It’s a city that’s so illusory,” Towne told The Associated Press in a 2006 interview. “It’s the westernmost west of America. It’s a sort of place of last resort. It’s a place where, in a word, people go to make their dreams come true. And they’re forever disappointed.”

Recognizable around Hollywood for his high forehead and full beard, Towne won an Academy Award for “Chinatown” and was nominated three other times, for “The Last Detail,” “Shampoo” and “Greystoke.” In 1997, he received a lifetime achievement award from the Writers Guild of America.

“His life, like the characters he created, was incisive, iconoclastic and entirely (original),” said “Shampoo” actor Lee Grant on X.

Towne was born Robert Bertram Schwartz in Los Angeles and moved to San Pedro after his father’s business, a dress shop, closed down because of the Great Depression. His father changed the family name to Towne.

Towne’s success came after a long stretch of working in television, including “The Man from U.N.C.L.E” and “The Lloyd Bridges Show,” and on low-budget movies for “B” producer Roger Corman. In a classic show business story, he owed his breakthrough in part to his psychiatrist, through whom he met Beatty, a fellow patient. As Beatty worked on “Bonnie and Clyde,” he brought in Towne for revisions of the Robert Benton-David Newman script and had him on the set while the movie was filmed in Texas.

Towne’s contributions were uncredited for “Bonnie and Clyde,” the landmark crime film released in 1967, and for years he was a favorite ghost writer. He helped out on “The Godfather,” “The Parallax View” and “Heaven Can Wait” among others and referred to himself as a “relief pitcher who could come in for an inning, not pitch the whole game.” But Towne was credited by name for Nicholson’s macho “The Last Detail” and Beatty’s sex comedy “Shampoo” and was immortalized by “Chinatown,” the 1974 thriller set during the Great Depression.

“Chinatown” was directed by Roman Polanski and starred Nicholson as J.J. “Jake” Gittes, a private detective asked to follow the husband of Evelyn Mulwray (played by Faye Dunaway). The husband is chief engineer of the Los Angeles Department of Water and Power and Gittes finds himself caught in a chaotic spiral of corruption and violence, embodied by Evelyn’s ruthless father, Noah Cross (John Huston).

Influenced by the fiction of Raymond Chandler, Towne resurrected the menace and mood of a classic Los Angeles film noir, but cast Gittes’ labyrinthine odyssey across a grander and more insidious portrait of Southern California. Clues accumulate into a timeless detective tale, and lead helplessly to tragedy, summed up by one of the most repeated lines in movie history, words of grim fatalism a devastated Gittes receives from his partner Lawrence Walsh (Joe Mantell): “Forget it, Jake, it’s Chinatown.”

The back story of “Chinatown” has itself become a kind of detective story, explored in producer Robert Evans’ memoir, “The Kid Stays in the Picture”; in Peter Biskind’s “East Riders, Raging Bulls,” a history of 1960s-1970s Hollywood, and in Sam Wasson’s “The Big Goodbye,” dedicated entirely to “Chinatown.” In “The Big Goodbye,” published in 2020, Wasson alleged that Towne was helped extensively by a ghost writer — former college roommate Edward Taylor. According to “The Big Goodbye,” for which Towne declined to be interviewed, Taylor did not ask for credit on the film because his “friendship with Robert” mattered more.

The studios assumed more power after the mid-1970s and Towne’s standing declined. His own efforts at directing, including “Personal Best” and “Tequila Sunrise,” had mixed results. “The Two Jakes,” the long-awaited sequel to “Chinatown,” was a commercial and critical disappointment when released in 1990 and led to a temporary estrangement between Towne and Nicholson.

Around the same time, he agreed to work on a movie far removed from the art-house aspirations of the ’70s, the Don Simpson-Jerry Bruckheimer production “Days of Thunder,” starring Tom Cruise as a race car driver and Robert Duvall as his crew chief. The 1990 movie was famously over budget and mostly panned, although its admirers include Quentin Tarantino and countless racing fans. And Towne’s script popularized an expression used by Duvall after Cruise complains another car slammed him: “He didn’t slam into you, he didn’t bump you, he didn’t nudge you. He rubbed you.

“And rubbin,′ son, is racin.'”

Towne later worked with Cruise on “The Firm” and the first two “Mission: Impossible” movies. His most recent film was “Ask the Dust,” a Los Angeles story he wrote and directed that came out in 2006. Towne was married twice, the second time to Luisa Gaule, and had two children. His brother, Roger Towne, also wrote screenplays, his credits include “The Natural.”



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Analyzing impact of Supreme Court’s Trump immunity decision

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It’s been a day since the Supreme Court ruled that former President Donald Trump has immunity from criminal prosecution for official acts taken in office but that he is not protected from prosecution for unofficial acts. CBS News legal analyst Jessica Levinson joins to unpack the decision.

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