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Meaning / Definition of
Qualification Ratio
Categories: Credit and Debt, Real Estate,
Measurement used by mortgage lenders to determine the creditworthiness of a borrower. Lenders use two types of ratios. The debt to income ratio measures a borrower's debt in relation to monthly income. The housing expenses to income ratio measures a borrower's housing expenses (including mortgage payments, taxes and insurance) in relation to monthly income.
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