Lenders use ____ ratios when setting limits on how much a home buyer can borrow.

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Lenders typically use both front-end and back-end ratios when evaluating a borrower's ability to repay a mortgage loan. The front-end ratio looks at the borrower's monthly housing payments compared to their monthly income, while the back-end ratio considers the borrower's total monthly debt payments (including the mortgage payment) in relation to their monthly income. This helps ensure that the borrower is not taking on more debt than they can afford to repay.

Lenders Use ____ Ratios When Setting Limits on How Much