Financial Obligation Ratio - FOR

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
  4. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  5. Forbearance

    A temporary postponement of mortgage payments.
  6. Mortgage Modification

    A permanent change in a homeowner's home loan terms that makes ...
Related Articles
  1. A Tax Primer For Homeowners
    Taxes

    A Tax Primer For Homeowners

  2. Understanding Your Mortgage
    Personal Finance

    Understanding Your Mortgage

  3. Mortgages: How Much Can You Afford?
    Budgeting

    Mortgages: How Much Can You Afford?

  4. The Benefits Of Mortgage Repayment
    Home & Auto

    The Benefits Of Mortgage Repayment

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center