Debt Service Ratios Infographic
Total Debt Service and Gross Debt Service ratios play a crucial role in mortgage approval. Discover the impact these tools have on determining mortgage affordability with this Total Debt Ratios infographic. Understanding Total Debt Service (TDS) and Gross Debt Service (GDS) ratios is important for anyone considering borrowing money for a mortgage. These metrics help lenders assess an applicant’s ability to manage their debt in relation to their income.
Total Debt Service Ratio
TDS is one of the primary lending metrics used by lenders to assess a borrower’s capacity to take on additional loans and mortgage payments. TDS considers all debt obligations, including credit card payments and other loans.
Gross Debt Service Ratio
GDS is one of the primary lending metrics used by lenders to assess a borrower’s capacity to take on housing debt. GDS focuses specifically on housing-related costs, including mortgage payments, property taxes, and heating expenses, typically suggesting that these should not exceed a certain percentage of gross income.
The Debt Service Ratios infographic illustrates how both approaches are used by financial institutions to determine how much one can afford and manage to borrow. By grasping these ratios, borrowers can better understand their financial standing and make informed decisions, which is essential for securing a mortgage that fits their budget and lifestyle.
FreshPlan also includes companion calculators regarding mortgage and debt.
- Mortgage Affordability
- Debt Consolidation
- Loan and Debt Payment calculator
- Loan Calculator
“Discover the impact of Debt Service Ratios on determining mortgage affordability.”
Sharing the Debt Service Ratios infographic
Advisors can use this tool to initiate discussions around budgeting, debt management, and the importance of maintaining healthy financial habits. This not only empowers clients to take control of their financial health but also positions the advisor as a knowledgeable resource in their financial journey. By making the information accessible and engaging, advisors can encourage clients to evaluate their current financial situation and make adjustments before applying for a mortgage, ultimately leading to more successful outcomes in the borrowing process.
Infographic Features
- Communicate complex concepts with vibrant, sharable, easy-to-understand infographics
- Personalized for individual Advisors
- Current and timely for client communications
- One of many infographics included in FreshPlan software
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