What are the calculations used to determine if a borrower can qualify for a mortgage called?

The calculations used to determine if a borrower can qualify for a mortgage are referred to as qualifying ratios. These ratios analyze the borrower's financial stability by comparing their monthly debt payments to their gross monthly income. The two primary components typically assessed in qualifying ratios are the front-end ratio, which looks at housing costs relative to income, and the back-end ratio, which considers all monthly debt obligations in relation to income. Home lenders rely on these ratios to evaluate the borrower’s ability to make mortgage payments without financial strain, thereby ensuring that the potential borrower meets the necessary creditworthiness standards for obtaining a loan.

The other concepts, such as debt-to-income ratios, loan-to-value ratios, and affordability ratios, serve distinct purposes in the mortgage qualification process but are not commonly or exclusively termed "qualifying ratios."