front-end ratio(redirected from Front End Ratios)
A mortgage qualification calculation prepared by taking the proposed monthly mortgage payments, plus real estates taxes and insurance, and dividing that number by the borrower's gross monthly income without reduction for taxes.
Example: Steve makes $4,000 per month. The mortgage for a home he would like to buy would result in payments of $1,100 per month. His front-end ratio is $1,100 $4,000 27.5%. This is an acceptable ratio for lenders, who would prefer to keep it at 29 percent or lower.