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 carnahandavid
Joined: 21 Dec 2006
Posts: 239
58.41 Dollars($)
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 Posted: Thu Dec 21, 2006 5:07 pm Post subject: total debt service |
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| anyone can give some information on total debt service ratio?how it is calculated? |
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blue
Joined: 21 Oct 2005
Posts: 1138
Location: MARYLAND
137.84 Dollars($)
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| Posted: Thu Dec 21, 2006 5:17 pm Post subject: |
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Hi David,
Welcome to Mortgagefit forum.
This ratio is used by lenders for assessing whether any borrower's current debt burden is high or not.
This ratio shows the proportionate comparison of expenditure on housing related & similar payments to a person's gross income.
Let us know if you have any other questions.
Thanks
Blue
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Lets help each other. Try my blog |
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colin
Moderator
Joined: 30 Jun 2006
Posts: 602
Location: Waltham, Massachusetts
112.65 Dollars($)
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| Posted: Thu Dec 21, 2006 5:34 pm Post subject: |
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Hi David,
Let me give your some more details about Total Debt Service ratio.
If the ratio comes to less than 40% then it means the borrower's level of debt is within acceptable limits.
Ratio is calculated as:
Annual Mortgage Payments + Other Debt Payments + Property Taxes
______________Gross Family Income
Hope your own calculation comes to be under 40% as per the formula. 
Colin |
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Shane
Guest
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| Posted: Sat Dec 23, 2006 1:48 am Post subject: |
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| I think they are reciprocals. Debt to incomer raio is the ratio of total debt and total income. But Gross debt service ratio is the ratio of income to total debt. |
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sara
Moderator
Joined: 05 Jul 2006
Posts: 1679
Location: New Brunswick, New Jersey
315.11 Dollars($)
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| Posted: Sat Dec 23, 2006 2:30 am Post subject: RE: both ratios are same |
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Hi David,
Both ratios are the same. The terms are different for USA and Canada. In USA its the debt to income ratio while in Canada the same ratio is known as Gross Debt Service Ratio.
Thanks,
Sara |
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