Qualifying Ratios

Qualifying Ratios – Ratios of a borrowers expenses to income; they must hit a certain level to qualify for a loan. The primary ratios are housing expenses to income and total expenses to income.

  • Example: Borrowers must qualify not only on a gross income basis but also through several qualifying ratios as well in order to provide the lender with the comfort they need to feel confident that the borrower will repay the loan.
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