The lower your front-end and back-end ratios, the more likely you are to qualify for a mortgage. The Bottom Line Understanding your back-end ratio is key to preparing for getting a mortgage and other types of loans, as lender use this ratio among other factors to assess how risky you ...
The back-end DTI ratio is commonly known as thedebt-to-income ratio (DTI)since it includes all monthly debt obligations and housing payments. When a lender refers to your debt-to-income, they are usually referring to the back-end DTI, meaning all of your monthly debts versus your monthly ...
Lenders prefer a front-end ratio of no more than 28% for most loans and 31% or less forFederal Housing Administration (FHA) loansand a back-end ratio of no more than 43%.3Higher ratios indicate an increased risk of default. However, lenders may accept higher ratios when certain factors ...