The difference between a front-end and a back-end debt-to-income ratio for a Kentucky Mortgage Loan FHA, VA, KHC, USDA, Fannie Mae
You should know what you can afford before beginning your search for a home. This enables you to
focus on realistic choices and saves you time and effort.
This section will show you how to calculate the amount you comfortably can spend for a home. What
is the difference between a front-end and a back-end debt-to-income ratio?
Before making a loan, the lender wants to be certain the borrower has the ability to repay. Before
approving your mortgage loan application a lender will look at several factors to gauge the risk
you pose as a borrower. There are two calculations your lender makes when determining your level of
Monthly debt obligations are the primary benchmark used to determine whether the borrower will be able to meet the expenses involved in home ownership. Housing expense is considered one of several components that make up the total debt-to-income ratio benchmark; there is not a separate housing-to-income benchmark unto itself.
Maximum Debt Ratios
Maximum ratios are 31%/43% for manually underwritten loans.