Front end ratio,

Definition of Front end ratio:

1. A matrix used by the lender to assess the applicant's ability to repay the mortgage. It is similar to a back-end index, except that it does not consider the repayment of any loan other than the requested loan. The lower the rate, the more eligible the borrower will be. Also known as a preliminary report. Formula: (Entry into compulsory loans + Estimated monthly installment of property tax + Estimated monthly installment of home insurance premium) Total monthly income. Also known as a preliminary report.