Qualification Ratios

Qualification Ratios

Requirements stipulated by the lender that the ratio of housing expense to borrower income and the ratio of housing expense plus other debt service to borrower income cannot exceed specified maximums,e.g.,28% and 35%.

These may reflect the maximums specified by Fannie Mae and Freddie Mac; they may also vary with the loan-value ratio and other factors. See Qualification.

References in periodicals archive ?
The average value of the six qualification ratios related to each factor was obtained to form the main effect plot (see Fig.
However, it should be noted that the qualification ratio of soldering decreased with the decrease of tin ball's diameter [3].
2] pressure and laser energy, and to achieve acceptable micro-deformation of head slider for soldering nine-welding-spot sliders to suspensions with a high qualification ratio.
The resulting qualification ratio is approximately 99.
Finally, volume production of HGA showed that the proposed laser jet soldering process based on 55 [micro]m tin balls can manufacture HGA products with a qualification ratio of approximately 99.
Lenders also use mortgage qualification ratios to measure repayment ability for mortgage qualification.
These qualification ratios are applied throughout the mortgage industry for conventional loans, although the range may vary slightly by lender.
Assuming the client can meet the mortgage qualification ratios, another option is to increase the balance of the new mortgage above the pay-off on the existing mortgage.
The second qualification ratio is called the 36% rule, the back-end ratio or the debt repayment ratio.
There are two mortgage qualification ratios widely used--the front-end ratio and the back-end ratio.
50 Coverage Ratio Total annual long-term debt payments Debt-to-Income Ratio Annual consumer credit payments < 15% Annual after-tax income "Front-end" Mortgage Annual mortgage (PITI) payment * < 28% Qualification Ratio Annual gross income "Back-end" Mortgage Annual mortgage (PITI) and < 36% Qualification Ratio credit payments * Annual gross income * Principal, Interest, Taxes, and Insurance; see below.
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