And when they see that the DTI ratio
has been exceeded, the lender will probably have to take the loan back.
Fitch has accounted for the aggregate debt position when estimating the borrower's debt-to-income (DTI) ratio, resulting in a higher-than-market average DTI ratio
for UBLs of approximately 60%.
Tighten the DTI ratio
requirement to more accurately reflect the borrower's debt repayment ability
Korea's DTI ratio
was higher than major countries, including the U.
QM standards also include a 3 percent limit for points and fees; a maximum term of 30 years or less, and a cap of 43 percent on the back-end DTI ratio
, among other requirements.
76) According to industry regulators, a borrower's DTI ratio
is a crucial consideration in making a loan because it determines whether sufficient income remains for living expenses.
1) We find that the DTI ratio
at the time of origination is not a strong predictor of future mortgage default.
Since Fitch's model was developed using a debt-to-income (DTI) ratio, in its analysis, Fitch mapped the DTR to a DTI ratio
of comparable credit risk.
Until that time, a large number of loans will qualify as QMs without meeting the 43 percent DTI ratio
A broader measure of debt burden is the overall DTI ratio
, which includes mortgage and non-mortgage debt in the numerator.
The Korean government announced on August 29, 2010 a temporary relaxation of DTI ratio
regulations for mortgage loans in order to stimulate the depressed housing market.