Budget Backwards glossary
Key terms
The short version
These terms come up when you plan a purchase from your budget, each with a primary source.
Last reviewed against the primary sources listed below.
- Front-end ratio
- Your monthly housing expense divided by your gross monthly income. Source: CFPB: What is a debt-to-income ratio?
- Back-end ratio
- All monthly debt payments, including housing, divided by gross monthly income. Source: CFPB: What is a debt-to-income ratio?
- Preapproval
- A lender's written statement of how much it may lend you, based on a review of your finances. Source: CFPB: What's the difference between a prequalification letter and a preapproval letter?
- Housing counselor
- A HUD-approved advisor who helps with budgeting and home buying, often at low or no cost. Source: HUD: Find a HUD-approved housing counselor