What is a qualifying ratio?
A qualifying ratio represents the percentage of your income that would be allocated to housing and non-housing expenses when purchasing or refinancing a home.
A qualifying ratio is often calculated for both housing an total debt depending on the loan program that you are applying for.
The housing ratio is calculated by diving your proposed housing expense by your gross qualifying income.
Your total debt to income ratio is calculated by diving your housing and non-housing debt (excluding utilities) by your gross qualifying income.