qualifying ratios

qualifying ratios
USA
Data used to decide whether a potential borrower qualifies for a mortgage. Lenders compare a borrower's monthly income to the proposed monthly mortgage expenses to decide whether the borrower is creditworthy. A "front" or "top" ratio reflects the borrower's monthly housing costs as a percentage of monthly income. This includes mortgage insurance fees, taxes and principle. A "bottom" or "back" ratio reflects the sum of monthly housing costs and all other monthly debt.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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