Definition
One of the ratios used by lenders in judging an applicant's capacity to pay back a home mortgage loan. Lower this ratio is, the better qualified the applicant is for the loan. Also called back ratio. See also front end ratio. Formula: (All other loan installments + Installment on the applied-for loan + Monthly-portion of estimated property taxes + Monthly-portion of home-insurance premium) ÷ Gross monthly income.
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