What are front end and back end debt-to-income ratios for a mortgage?2018-04-30T18:35:52+00:00

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The front-end ratio is a ratio that indicates which portion of the buyer’s income is going to be used to make the monthly mortgage payments. This is usually calculated by the cost of the monthly housing expenses divided by the monthly gross income.

The back-end ratio, also known as the debt-to-income ratio, is the ratio that indicates how much of the buyer’s monthly income goes towards paying debts such as; credit card payments, car loans, student loans, child support and other monthly debts.

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