Measure your financial health before applying for new credit. This analyzer calculates your DTI ratio and solvency levels, providing a snapshot of your creditworthiness and overall capacity to take on new financial obligations.
--%
--%
Awaiting Input
$0
Compare your ratios against standard conforming loan requirements to identify qualification risks.
This Solvency Analyzer executes ratio-based simulations to identify underwriting barriers. The algorithm evaluates the Front-End/Back-End differential, residual cash flow, and borrowing elasticity using standardized lending benchmarks for mortgage and commercial credit.
Advanced framework for underwriting assessment and solvency planning. kovertiz.com ensures data privacy via local client-side processing with zero server-side retention.
Mathematical simulation of debt-to-income (DTI) elasticity and institutional approval benchmarks.
Liabilities Reduction Strategy = Ratio Adjustment from 48% to 39% [Qualified Status]
PITI Simulation ($2,400/mo) vs Gross Income ($8,600/mo) = 27.9% [Optimal Tier]
Social Security / Disability (Net) * 1.25 = Adjusted Gross Income for Solvency Audit
Technical reference for borrowing capacity. Evaluate your DTI ratios against institutional lending standards with kovertiz.com.
| Financial Metric | Lending Impact | Technical Context & SEO Definition |
|---|---|---|
| Back-End DTI Ratio | Approval Ceiling | The ratio of total monthly debt to gross income. Most lenders enforce a hard cap at 43% for Qualified Mortgages. |
| Front-End (Housing) Ratio | Initial Eligibility | Measures proposed PITI (Principal, Interest, Taxes, Insurance) against income. Conventional targets are usually 28%. |
| Residual Income Analysis | Cash Flow Safety | The net cash remaining after all debts and taxes. A primary solvency metric for VA Loans to ensure borrower stability. |
| Grossing-Up Adjustment | DTI Optimization | Increasing non-taxable income (e.g., Social Security) by 25% to its pre-tax equivalent to artificially lower the DTI ratio. |
| Compensating Factors | Risk Mitigation | Attributes like high cash reserves or a large down payment that allow underwriters to approve DTIs above standard limits. |
| Qualified Mortgage (QM) | Regulatory Status | A loan that meets Ability-to-Repay (ATR) rules. Exceeding 43% DTI often pushes the loan into Non-QM territory with higher rates. |
| Manual Underwriting | Human Risk Review | An in-depth review process for borrowers whose solvency metrics don't fit Automated Underwriting System (AUS) algorithms. |
Deep dive into revolving amortization logic, APR compounding, and liquidation velocity.
Interest is calculated using the Average Daily Balance (ADB) method. The Daily Periodic Rate (DPR)—APR divided by 365—is applied to your balance every 24 hours. This creates intra-cycle compounding, where interest accrued in the previous period becomes part of the principal for the next day's calculation.
It represents a state of near-negative amortization. Minimum payments typically cover periodic interest charges plus only 1% of the principal. This structure extends the weighted average life of the debt significantly, converting a revolving line into a perpetual liability with a 20+ year payoff lifecycle.
Failing to pay a statement balance in full triggers the forfeiture of the interest-free grace period. Subsequent transactions incur immediate interest accrual from the posting date. Restoring the grace period generally requires a zero-balance statement for two consecutive billing cycles.
A Credit Hardship Program acts as a temporary interest rate floor. By lowering the APR, a higher percentage of the fixed monthly payment is reallocated from servicing costs to principal reduction, accelerating the debt's liquidation velocity.
Also known as Trailing Interest, it is the interest accrued between the statement closing date and the date the final payment is cleared. Because of daily periodic accrual, paying the "statement balance" does not account for the interest generated during the payment processing window.
Revolving utilization represents 30% of the FICO scoring model. Reducing the balance-to-limit ratio below 10% triggers high score elasticity, potentially leading to rapid credit score gains. This tool models the specific principal injection required to reach these tiers.