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.

RELATED TERMS
  1. Total Housing Expense

    The sum of a homeowner's monthly mortgage principal and interest ...
  2. Cash Available For Debt Service ...

    A ratio that measures the amount of cash a company has on hand ...
  3. Obligation

    The responsibility to meet the terms of a contract. If an obligation ...
  4. Term Payment Plan

    An option for receiving reverse mortgage proceeds that gives ...
  5. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  6. Back-End Ratio

    A ratio that indicates what portion of a person's monthly income ...
Related Articles
  1. Investing

    Debt Ratio

    The debt ratio divides a company’s total debt by its total assets to tell us how highly leveraged a company is—in other words, how much of its assets are financed by debt. The debt component ...
  2. Professionals

    III. Debt Management Ratios

    III. Debt Management Ratios
  3. Trading Strategies

    Financial Ratios to Spot Companies Headed for Bankruptcy

    Obtain information about specific financial ratios investors should monitor to get early warnings about companies potentially headed for bankruptcy.
  4. Credit & Loans

    Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  5. Credit & Loans

    Debt Ratios: Introduction

    By Richard Loth (Contact | Biography)The third series of ratios in this tutorial are debt ratios. These ratios give users a general idea of the company's overall debt load as well as its mix ...
  6. Credit & Loans

    Using Home Equity Loans For Debt Consolidation

    A home equity loan or line of credit is a convenient way to consolidate debts, cut your interest rate and gain a tax deduction. But there are big risks.
  7. Investing Basics

    Understanding Leverage Ratios

    Large amounts of debt can cause businesses to become less competitive and, in some cases, lead to default. To lower their risk, investors use a variety of leverage ratios - including the debt, ...
  8. Credit & Loans

    Mortgage Basics: Costs

    By Lisa SmithPeople generally think about a mortgage in terms of the monthly payment. While that payment represents the amount of money needed each month to cover the debt on the property, the ...
  9. Home & Auto

    Understanding The Mortgage Payment Structure

    While a mortgage’s size and term set the baseline, the interest, taxes and insurance all influence the amount of the monthly payment.
  10. Economics

    Calculating Long-Term Debt to Total Assets Ratio

    A company’s long-term debt to total assets ratio shows the percentage of its assets that are financed with long-term debt.
RELATED FAQS
  1. What is the difference between the debt ratio of a company and the debt ratio of ...

    Discover the different financial evaluation measures that are most commonly applied to individuals and corporations, respectively. Read Answer >>
  2. What is a good debt ratio, and what is a bad debt ratio?

    Learn about the factors that influence how investors and lenders evaluate the debt ratio for a company and why the answer ... Read Answer >>
  3. Over what duration should I be evaluating a company's total debt to total assets ...

    Learn what duration to use when analyzing the total debt to total assets ratio in a company and how to track a company's ... Read Answer >>
  4. How does the International Monetary Fund function?

    Learn how expenditures and distributions affect the fixed charge coverage ratio, and how this ratio is used to evaluate a ... Read Answer >>
  5. What are the best ways to pay off my mortgage quickly?

    Learn how mortgage payments may be reduced and how to save thousands on mortgage loans by lowering the interest and principle ... Read Answer >>
  6. Is homeowners’ insurance tax deductible?

    Learn whether homeowners' insurance is tax-deductible, and find out about instances where you can deduct home insurance payments ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center