ABSTRACT
Mortgage lending raises two financial issues which are interfaced: an issue of credit-worthiness, and another of affordability. The banker will not lend unless he is assured of the credit-worthiness of the borrower. Symmetrically, the borrower should not borrow unless he can afford the debt service on the loan. Such a simple problem can be solved with simple solutions. Ratio analysis, presented in this chapter, is the appropriate tool.
