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Front and back end ratios

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Jem Berry Guest	Posted: Mon Oct 31, 2011 11:09 pm    Post subject: Front and back end ratios Like 0 Dislike 0 I am planning to apply for mortgage and I hear a lot about ratios. Can anyone help me know what these front and back end ratios are all about? _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
sara Moderator Joined: 05 Jul 2006 Posts: 2699 Location: New Brunswick, New Jersey 497.27 Dollars($)	Posted: Mon Oct 31, 2011 11:36 pm    Post subject: Like 0 Dislike 0 Hi Jem, When you apply for a mortgage, the lender will take a look at your debt to income ratio. The front end and back end ratios are a part of this debt to income ratio. The front end ratio helps you and the lender know about the percentage of income that goes toward your housing costs - rent payments or your mortgage principal and interest, mortgage insurance premium, hazard insurance premium, property taxes, and homeowners' association dues. The back end ratio is the percentage of income that goes toward paying all recurring debt payments. This may include your credit card payments, student loans, medical bills, child support, car loans and so on. For conventional loans, the front end and the back end ratio should be 28/36 and for FHA loans, it should be 31/43. Take care.
smithsussane Joined: 18 Sep 2008 Posts: 10439 Location: Alaska 985.83 Dollars($)	Posted: Wed Nov 02, 2011 7:27 pm    Post subject: Like 0 Dislike 0 Hi Jem! Welcome to forums! Unless you have the required debt to income ratio, you won't be able to qualify for a mortgage. If you don't have the required debt to income ratio, you need to either pay off your debts or you may have to increase your income. Feel free to ask if you've further queries. Sussane

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