What are the Qualifying Ratios?

Standard Front-end Ratio is expected to be under 0.28 (or 28%). It is the ratio of your monthly payments for principal, interest, property taxes, and fire insurance divided by your gross income. Symbolically, it is: PITI/Gross Income.

Standard Back-end Ratio is expected to be under 0.36 (or 36%). It is the ratio of PITI plus your monthly payments for long-term debts (credit card, auto, etc.) divided by your gross income. Symbolically, it is:  (PITI + long-term debt)/Gross Income.

Different organizations use variations of these ratios. For example, the Federal Housing Administration (FHA) uses 29/41 formula, including Mutual Mortgage Insurance (MMI).