Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What are debt ratios?

debt ratios
0
Posted

What are debt ratios?

0 CommentsAdd a Comment

1 Answer

0

Debt ratios are guidelines used by the lenders to ensure a borrower is not exceeding what he/she can afford. There are ratios: the Housing Ratio, (also called Payment-to-Income ratio or Front-End ratio), and the Total Debt Ratio, (also called the Obligations-to-Income ratio or Back-End ratio). The Housing Ratio is the monthly housing payment (PITI Principal, Interest, Taxes, Insurance) divided by the total gross monthly income. The Total Debt Ratio is the housing payment plus other monthly debt, dividend by gross monthly income.

0 CommentsAdd a Comment

Related Questions

What is your question?

*Sadly, we had to bring back ads too. Hopefully more targeted.