When trying to qualify for a mortgage. What are front and back ratios?
The Front Ratio is your (PITI) Principal, Interest, Property Taxes, PMI and HOA (if applicable) as a percentage of your gross income. The Back Ratio is your PITI plus any monthly debts listed on your credit report. In most cases, the lenders are qualifying a borrower on your back end ratio which can vary between 43% & 50% depending on the loan program. If though, your file requires a 'Manual Underwrite' the Front Ratio will be considered and typically will need to be in the 31% range to get approved. | 12.28.15 @ 18:06