What are the front ratio and back ratio, and how do they differ?

What will be an ideal response?

Lenders calculate income ratios such as the payment-to-income ratio (PTI) to assess the applicant's ability to pay. These ratios compare the monthly payment that the applicant would have to pay if the loan is granted to the applicant's monthly income. The most common measures are the front ratio and the back ratio. The front ratio is computed by dividing the total monthly payments (which include interest and principal on the loan plus property taxes and homeowner insurance) by the applicant's pre-tax monthly income. The back ratio is computed in a similar manner. The modification is that it adds other debt payments such as auto loan and credit card payments to the total payments. In order for a loan to be classified as "prime," the front and back ratios should be no more than 28% and 36%, respectively.