What is the 'FrontEnd Ratio'
The frontend ratio is a ratio that indicates what portion of an individual's income is used to make mortgage payments. It is calculated as an individual's monthly housing expenses divided by his or her monthly gross income and is expressed as a percentage. Monthly gross income is simply annual income divided by 12 (months). Lenders use the frontend ratio in conjunction with the backend ratio to approve mortgages.
Calculated as:
BREAKING DOWN 'FrontEnd Ratio'
For example, if your annual income is $60,000, your monthly income is $5,000(60,000/12). By asking your lender what frontend ratio would be required in order for your mortgage to be approved, you can figure how much of that $5,000 you can allocate to your mortgage payments. If the required frontend ratio is 31%, you can allocate $1,550 (5,000 x 0.31). Thus, if your PITI is $1,550 or less, you would be approved.
Typical monthly housing expenses include the mortgage principal, interest, taxes and insurance payments  collectively known as PITI.

BackEnd Ratio
A ratio that indicates what portion of a person's monthly income ... 
Qualifying Ratios
A set of ratios that are used by lenders to approve borrowers ... 
FrontEnd DebttoIncome Ratio ...
A variation of the debttoincome ratio (DTI) that calculates ... 
Principal, Interest, Taxes, Insurance ...
The components of a mortgage payment. Principal is the money ... 
Housing Expense Ratio
A ratio comparing housing expenses to beforetax income that ... 
Qualification Ratio
Ratio of debt to income and housing expense to income that is ...

Professionals
III. Debt Management Ratios
III. Debt Management Ratios 
Budgeting
Mortgages: How Much Can You Afford?
Answering this means numbercrunching as well as factoring in other considerations and expenses. 
Credit & Loans
Mortgage Basics: Loan Eligibility
By Lisa Smith"How much house can I afford?" It's a critical question that every homebuyer faces, and one that many people answer by going to a lender and taking out the largest mortgage that ... 
Home & Auto
Mortgages: How Much Can You Afford?
The cost of a home is the single largest expense most people ever face. Prior to taking on such an enormous debt, itâ€™s best to do the math. 
Credit & Loans
Smart Ways to Use a Mortgage Calculator
When you're buying a home, it's essential to do due diligence about the true costs. Mortgage calculators will show you if you can afford the purchase. 
Credit & Loans
Understanding The Mortgage Payment Structure
We explain the calculation and payment process as well as the amortization schedule of home loans. 
Credit & Loans
5 Ways to Up Your Chance of Getting a Mortgage
Tips and ways to improve your chances of getting a mortgage. 
Credit & Loans
The Best Mortgage Deal (May Not Be What You Think)
Don't judge a mortgage solely by payment amount. Here's what insiders know about choosing the most advantageous mortgage offer. 
Options & Futures
Score A Cheap Mortgage
Hidden costs can create what looks like a good deal. Find out how to find the best mortgage possible. 
Options & Futures
Be MortgageFree Faster
Getting rid of this debt faster has bigger benefits than you might think.

What is the debt ratio for an FHA loan?
Borrowing through the Federal Housing Administration requires individuals to provide proof of income as well as information ... Read Answer >> 
How does my debttoincome (DTI) ratio affect my ability to get a mortgage?
Find out how much your debttoincome ratio affects your ability to get a good mortgage rate when buying a home. Read Answer >> 
How does the loantovalue ratio affect my mortgage payments?
Understand what the loan to value ratio is, how the ratio is calculated and learn how it has an impact on your mortgage payments ... Read Answer >> 
What are the main income statement ratios?
Learn how to calculate and interpret some of the most common and insightful financial ratios, like earnings per share, from ... Read Answer >> 
What is the difference between gross income and earned income?
Being able to distinguish between earned income and gross income is an important tool in preparing for and filing your individual ... Read Answer >> 
What are the pros and cons of a simpleinterest mortgage?
Learn the difference between a simple interest mortgage and a standard mortgage, along with their relative advantages and ... Read Answer >>