Which of the following is true about calculating debt-to-income ratio?

The statement regarding the inclusion of rental payments in the calculation of the debt-to-income ratio is accurate because the debt-to-income (DTI) ratio is designed to assess an individual's ability to manage monthly debt obligations in relation to their income. This ratio typically includes all recurring debt payments, which encompasses not only mortgages but also rental payments, credit card payments, auto loans, and other forms of debt. By including rental payments, the ratio provides a more comprehensive view of an individual's financial obligations, thereby helping lenders evaluate the risk associated with lending to that individual.

Understanding this aspect of the debt-to-income ratio underscores its significance in financial assessments, as it helps determine how much of a person's income is already committed to debt before considering additional borrowing. Such holistic evaluations are crucial for both lenders and borrowers in making informed financial decisions.