Financial Glossary

Affordable housing refers to housing costs that do not exceed 30% of a household's gross income, a standard used by lenders and government agencies.

The debt-to-income ratio compares your monthly debt payments to your gross monthly income, used by lenders to assess borrowing capacity.

A debt obligation is a legal requirement to repay borrowed money according to agreed terms, including principal, interest, and payment schedule.

Debt burden is the total cost of carrying debt relative to income, including principal, interest, and fees, as a measure of financial strain.

A fixed debt payment is a recurring payment of the same amount each month until the debt is fully repaid, common with installment loans.

Gross monthly income is total income earned each month before any deductions for taxes, insurance, or other withholdings.

An income threshold is a minimum or maximum income level used to determine eligibility for loans, benefits, or tax treatments.

Lending standards are the criteria lenders use to evaluate loan applications, including credit score, DTI ratio, income, and collateral.

Monthly debt is the total amount a person pays each month toward existing debt obligations, including loans, credit cards, and other recurring payments.

Mortgage approval is a lender's decision to grant a home loan based on the borrower's creditworthiness, income, and property value.