Financial Obligation Ratio - FOR


DEFINITION of 'Financial Obligation Ratio - FOR'

An estimate of the ratio of debt payments to disposable income. The types of debt included in the financial obligation ratio include mortgage payments, credit cards, property tax and lease payments. For a homeowner, the FOR may also include homeowners' insurance and rental payments on tenant-occupied property. The FOR figure is released by the Federal Reserve each quarter.

BREAKING DOWN 'Financial Obligation Ratio - FOR'

The financial obligation ratio covers a broader range of debt types than the household debt service ratio (DSR). The higher the FOR, the higher the risk that households will be unable to meet their financial obligations and the less likely an individual will be approved for new loans or an increase in available credit.

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