The ratio of monthly housing cost (PITI) to gross monthly income. (See back-end ratio, PITI)
(i.e., income ratio) A calculation used by the lender to determine if an applicant's income is sufficient to afford the monthly payment. It is calculated by taking the monthly mortgage payment (principal, interest, taxes and insurance) and dividing it by the gross monthly income of the applicant. The acceptable ratio for affordable housing is between 30-35%. In other words, no more than 30-35% of the income should be set aside for the monthly mortgage payment.
Compares your proposed monthly house payment (PITI) to your total household gross monthly income. Also known as the housing expense-to-income ratio.
The ratio of housing expense to borrower income, which is used (along with the total expense ratio and other factors) in qualifying borrowers. Also see qualification requirements.
Also called a Top Ratio. This is a calculation of your total monthly housing expenses divided by your income. Lenders use a front-end ratio as a guideline to see if you qualify for a loan.
A comparison of a borrower's monthly cost of housing with that borrower's monthly gross income.
The ratio of house payment(s) - including insurance, PMI, and property taxes - to income.
Your prospective monthly mortgage payments divided by your gross monthly income. This comes out to a percentage, and a lender uses this percentage to get an idea of how much of your income will be going to pay your loan. If they like the number (say, below 29%) then they will be more inclined to sell you the loan.
The ratio of the monthly housing payment to total gross monthly income. Also called Payment-to-Income Ratio or Housing Ratio.
A lender calculation that compares a borrower's monthly housing expense (principal, interest, taxes, and insurance) to gross monthly income.
A comparison of a borrowers monthly cost of housing with that borrowers monthly gross income.
Also known as the housing expense-to-income ratio, it compares your proposed monthly house payment (PITI) to your total household gross monthly income.
