Definition: The mortgage-to-gross-income (MGI) ratio measures a borrower's total monthly expenses relative to their total annual income. It is calculated by subtracting the amount spent on debt from the amount earned in cash and non-cash investments, and then dividing that result by the amount of disposable personal net worth. In simple terms, if you have a MGI of 50% (meaning that your mortgage bills amount to more than half of your gross income), it means you're paying more than half of your income towards paying off debt. This ratio helps financial planners and lenders understand how well someone can handle their finances by comparing their monthly expenses against their total personal net worth. A high MGI ratio indicates a borrower has substantial financial stability, which can be advantageous in situations where financial resources are limited. However, it's important to note that the MGI ratio does not accurately reflect a borrower's creditworthiness or ability to pay back debt, especially if they have multiple debts with different terms and payments.
closed bracket.
what should be said.