What is typically not considered when qualifying a buyer's Front End ratio?

When qualifying a buyer's Front End ratio, the focus is on the proportion of a buyer's gross income that goes toward housing expenses. The Front End ratio typically includes relevant costs such as the principal and interest on the mortgage, property taxes, homeowner's insurance, and any applicable homeowners association (HOA) fees.

The reason future investment income is not considered in this ratio is that the Front End ratio is intended to assess the buyer's current financial capability to manage immediate housing expenses rather than potential future earnings from investments. This ratio is primarily concerned with current, fixed obligations that the buyer will have as part of homeownership, rather than speculative or variable sources of income that may not be realized.

In contrast, costs like taxes and insurance, HOA fees, and principal payments are all essential components of the monthly housing expenses that directly impact the buyer's affordability analysis.