QUALIFYING RATIO RETOTD Episode 00065
Podcast: Play in new window | Download | Embed
Subscribe: Android |
A ratio calculated by a lender to determine how much a potential buyer can borrow. Calculations that are used in determining whether a borrower can qualify for a mortgage. There are two ratios. The “top” or “front” ratio is a calculation of the borrower’s monthly housing costs (principle, taxes, insurance, mortgage insurance, homeowner’s association fees) as a percentage of monthly income. The “back” or “bottom” ratio includes housing costs as will as all other monthly debt.