What Is A Front-End Ratio / Housing Ratio

What Is A Front-End Ratio / Housing Ratio

A front-end ratio or housing ratio divides one's total monthly mortgage payment, also known as a PITI (Principal, Interest, Taxes and Insurance), by one's monthly income. For example a monthly mortgage payment of $1,000 with a gross monthly income of $5,000 shows that person has a 20% front-end ratio ($1K / $5K = .20).