Investment dictionary

BACKEND RATIO

Back-End Ratio: translation

A ratio that indicates what portion of a person's monthly income goes toward paying debts. Total monthly debt includes expenses such as mortgage payments (made up of PITI), credit-card payments, child support and other loan payments. Lenders use this ratio in conjunction with the front-end ratio to approve mortgages.



Also known as "debt-to-income ratio".

For example, if your monthly income is $5,000 ($60,000/12) and your total monthly debt payments are $2,000, your back-end ratio is 0.40 or 40%. Generally, lenders like to see a back-end ratio that does not exceed 36%; however, there are lenders who make exceptions for ratios of up to 50% if you have good credit. Some lenders consideronlythis ratio when approving mortgages, as opposed to using it in conjunction with the front-end ratio.

  1. backend ratio—фин. коэффициент общего долгаu конечный [нижний\] коэффициентu отношение общей суммы платежей в счет обслуживания разнообразных долгов за определенный период к сумме дохо...Англо-русский экономический словарь