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Mortgage Glossary

Housing Ratio

Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker

The housing ratio is the percentage of gross monthly income consumed by the total housing payment, the same as the front-end ratio.

What Housing Ratio means

Lenders compare it to program limits to ensure the payment is affordable. It includes principal, interest, taxes, insurance, and any HOA dues.

Florida example

A Florida condo buyer's housing ratio includes HOA dues on top of PITI. Adding $450 in dues can push the ratio past a program's comfort zone, so it's factored in early.

What it is

The housing ratio compares your monthly housing cost to your gross income. It is another name for the front-end ratio.

It shows how much of your pay the home takes.

Why it matters

A healthy housing ratio keeps your budget comfortable. Lenders set limits based on the loan program.

We find a payment that fits your life. Reach out and we will show a smart price range.

Related program: Learn more →

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Official resources

Verify the details for your own situation against these government and agency sources: CFPB Owning a Home guide and HUD homebuyer resources.

Related Mortgage Terms

HUD-1 Settlement StatementThe HUD-1 Settlement Statement was the itemized list of all closing charges, largely replaced by the Closing Disclosure for most consumer mortgages in 2015.Hybrid ARMA hybrid ARM is an adjustable-rate mortgage that combines an initial fixed-rate period with later adjustable periods.Impound AccountAn impound account is another name for an escrow account, where the servicer collects and pays your taxes and insurance.
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