how to calculate total debt service tds ratio in excel
the total debt service tds ratio can also be calculated in excel total debt service tds ratio vs gross debt service gds ratiothe total debt service tds ratio is very similar to another debt to income ratio used by lenders the gross debt service gds ratio the difference between tds and gds is that gds does not factor any non housing payments such as credit card debts or car loans into the equation because it reflects housing expenses only the gds ratio is also referred to as the housing expense ratio gds may be used in other personal loan calculations but it is most commonly used in the mortgage lending process you may also hear gds referred to as housing 1 ratio and tds as housing 2 ratio in practice the tds ratio the gds ratio and a borrower s credit score are the key components analyzed in the underwriting process for a mortgage loan borrowers should generally strive for a gds ratio of 28 or less special considerationsremember there are several other factors in addition to the total debt service tds and gross debt service tds ratios that lenders take into consideration when determining whether to advance credit to certain borrowers for instance a small lender one with less than 2 billion in assets and 500 or fewer mortgages in the past 12 months may offer a qualified mortgage to a borrower with a tds ratio exceeding 43 of course all lenders consider credit histories and credit scores people with high credit scores tend to manage their debts more responsibly they hold a reasonable amount of debt make payments on time and keep account balances low larger lenders may also be more likely to approve mortgages for borrowers with large savings accounts especially if they can make larger down payments lenders may also consider granting additional credit to borrowers with whom they have long standing relationships 