• The qualifying ratio measures a borrower’s ability to repay a loan, usually as a ratio of either debt to income or housing costs to income.
  • Lenders use qualifying ratios to help validate a loan application for approval and/or terms of a loan that is due to be renewed.
  • Lenders use the start rate in combination with the end rate to determine how much to lend.
  • Certain qualitative factors may also play a role, giving lenders some wiggle room to extend or deny credit.