What is NOT considered in the consumer's monthly debt-to-income ratio?

The option that is not considered in the consumer's monthly debt-to-income (DTI) ratio is utilities and food expenses. The DTI ratio is primarily calculated using a borrower’s regular, recurring monthly debt obligations that are reported and recognized in the underwriting process.

Monthly payments on the covered transaction, debt obligations such as alimony, and monthly mortgage-related obligations are all part of the formal assessment of a borrower’s financial commitments. These factors directly influence the overall calculation of the DTI because they reflect the borrower’s ability to manage large debt payments in relation to their gross monthly income.

In contrast, utilities and food expenses are categorized as everyday living expenses rather than fixed or contractual debts. They are variable costs and do not factor into the formal DTI calculations since lenders typically focus on longer-term debt obligations that impact financial reliability and repayment capacity. Understanding this distinction is crucial for evaluating a borrower’s overall financial health during the mortgage lending process.