Tuesday, August 24, 2010

Front- and back-end ratio with mortgages?

How do you determine your front- and back-end ratios? I'm a little confused how it works.





When determining front end, do you consider your current rent/mortgage payment or your future?





Thanks =)Front- and back-end ratio with mortgages?
The front end is the ratio of your gross monthly income vs. the payment, taxes, and insurance (PITI) of the property you are buying.





The back end is the ratio of your gross monthly income vs. PITI and all of your other monthly payments (credit card, car payment, student loans, etc.)

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