The front-end ratio compares the total annual expenditures for housing to the loan applicant's gross annual income.

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This is true. The front-end ratio is a common calculation used by lenders to determine if a loan applicant's income is sufficient to cover the cost of housing payments. This ratio is calculated by dividing the total housing expenses (including mortgage or rent, property taxes, and insurance) by the applicant's gross annual income. Lenders typically require a front-end ratio of 28% or lower for mortgage applicants.

The Front-End Ratio Compares the Total Annual Expenditures for Housing