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the bank that the payans would like to borrow from uses the back-end ratio to determine loan qualification, approving applications if the back-end ratio is less than 36%. so, the payans have collected some information on what the bank will consider to calculate the ratio, including what they estimate their monthly mortgage payment will be. income total monthly income $10,000 monthly expenses expected mortgage $1,100 house insurance $150 property taxes $500 car loan(s) $1,000 credit card debt $400 according to the payans’ back-end ratio calculation, the bank will lend the payans $250,000 to purchase the home because their back-end ratio is 36%.

Sagot :

Your monthly debt obligations, which include your mortgage and any other related housing debt, as a percentage of your gross income is known as your back-end ratio. Before any deductions or taxes, your gross income is what you make.

This ratio is crucial in the approval process since lenders use it to assess whether you can easily afford a loan or house mortgage or if it would put a burden on your finances.

Lenders may factor the following into your back-end ratio:

Mortgage obligations

property taxes

Dues for the homeowners association (HOA)

rates for homeowner's insurance

Paying using a credit card

Payments on personal loans

consolidation of debt

repayments on a car loan

education loan

mortgage loan payments

payments on credit lines

Child assistance

Alimony

There are several monthly responsibilities that lenders omit, despite the lengthy list of ones that are included in your back-end ratio. Lenders won't take the following into account when calculating your back-end ratio :

Groceries

Utility costs

automobile insurance rates

Gasoline

Other regular monthly costs

Learn more about back end process here :

https://brainly.com/question/14548129

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