Which definition corresponds to front-end DTI in mortgage lending?

• A. Housing payment to gross income; part of qualifying ratios.
• B. Total debt payments to gross income.
• C. Debt service coverage ratio.
• D. Loan-to-value ratio.

Answer: (A)

Front-end DTI is about housing costs relative to income. It measures how burdensome the monthly housing payment is by comparing the housing expense (usually the PITI: principal, interest, taxes, and insurance, plus any HOA dues) to gross monthly income. This ratio is a key part of the borrower’s qualifying ratios, used to gauge whether they can afford the mortgage without other debts dragging them down. The other concepts mentioned don’t describe this housing-focused measure: back-end DTI looks at all monthly debt payments relative to income, debt service coverage ratio is a business/commercial lending metric, and loan-to-value compares the loan amount to the property’s value. So the definition that matches front-end DTI is the housing payment to gross income and its role in qualifying ratios.