What is another name for back end ratio/DTI?

What is another name for back end ratio/DTI?

• A. TOR- Total Obligations Ratio
• B. Back-end Debt-to-Income
• C. Gross Debt Ratio
• D. Housing expense ratio

Answer: (A)

The key idea is that the back-end ratio (DTI) shows what portion of gross monthly income goes toward all monthly debt payments. The standard alternate name for this measure is Total Obligations Ratio, because it reflects the total obligations a borrower must pay each month—housing costs plus all other debts. This broader view is what lenders use to judge repayment ability, beyond just housing expenses. The term TOR is the widely recognized label for this measure in many regulatory and lending contexts. The other phrases aren’t the conventional name: “Back-end Debt-to-Income” is basically the same concept but not the established terminology; “Gross Debt Ratio” isn’t the standard term for this metric; and “Housing expense ratio” refers to the front-end ratio, which only considers housing costs.

The key idea is that the back-end ratio (DTI) shows what portion of gross monthly income goes toward all monthly debt payments. The standard alternate name for this measure is Total Obligations Ratio, because it reflects the total obligations a borrower must pay each month—housing costs plus all other debts. This broader view is what lenders use to judge repayment ability, beyond just housing expenses. The term TOR is the widely recognized label for this measure in many regulatory and lending contexts. The other phrases aren’t the conventional name: “Back-end Debt-to-Income” is basically the same concept but not the established terminology; “Gross Debt Ratio” isn’t the standard term for this metric; and “Housing expense ratio” refers to the front-end ratio, which only considers housing costs.