Finance
A Minnesota borrower's front-end ratio (housing ratio) of 28% is calculated by dividing:
ATotal debt by gross income
BMonthly housing expense (PITI) by gross monthly income✓ Correct
CNet income by total debt
DLoan amount by property value
Explanation
Front-end ratio = Monthly PITI / Gross Monthly Income. PITI includes principal, interest, property taxes, and homeowners insurance (and HOA dues if applicable). Lenders use this ratio to ensure housing costs are a manageable percentage of the borrower's income.
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