Borrower Ratios, Income, and LTV

Borrower ratio pages explain the numerical tests lenders use to compare housing costs, total debt, income, and collateral exposure. Use this section for DTI, LTV, and qualifying-ratio terms.

In this section

• 28/36 Rule: Understanding Debt Limits for Credit Applications
  A comprehensive guide on the 28/36 rule, which helps individuals and households measure their income against debt to ensure they meet ideal debt limits for credit applications. Learn what it is, how to use it, and see practical examples.
• Back-End Ratio: Definition, Calculation, and Comparison with Front-End Ratio
  An in-depth look at the back-end ratio, a key financial indicator used to assess a borrower's ability to manage monthly debt payments. Learn how to calculate it, understand its importance in lending decisions, and distinguish it from the front-end ratio.
• Front-End Debt-to-Income (DTI) Ratio: The Housing-Cost Affordability Test
  Learn what the front-end DTI ratio measures, what counts as housing cost, and why mortgage lenders use it alongside back-end DTI and LTV.
• Housing Expense Ratio: Importance, Calculation, and Impact
  An in-depth look at the Housing Expense Ratio, its significance, how to calculate it, and its impact on financial health and lending decisions.
• Loan-to-Value Ratio
  Lending ratio comparing loan amount with property value, central to mortgage underwriting, pricing, and leverage limits.
• Qualifying Ratios: Essential Tools in Loan Underwriting
  Comprehensive analysis of qualifying ratios used by lenders in loan underwriting, including definitions, calculations, applications, historical context, and examples.