Which ratio includes all debt obligations in its calculation?

The debt-to-income ratio is essential in evaluating a borrower's ability to manage monthly payments and repay debts. This ratio encompasses all debt obligations, which means it includes not only housing expenses, such as mortgage payments, property taxes, and homeowner's insurance, but also other debts, like credit card payments, auto loans, student loans, and personal loans.

By calculating the total monthly debt payments and dividing that by the borrower's gross monthly income, the debt-to-income ratio provides a clear picture of an individual's financial obligations relative to their income. A lower ratio typically indicates that a borrower has a manageable level of debt, making them more likely to secure a mortgage or loan, while a higher ratio may suggest potential financial strain.

In contrast, other options focus on specific aspects of a borrower's financial obligations. The housing expense ratio examines only housing-related costs, the loan-to-value ratio assesses the relationship between a mortgage and the property's value, and the payment-to-income ratio typically pertains to specific payments rather than total debt. Thus, the debt-to-income ratio is the only one that encompasses all debt obligations in its calculation, making it the correct answer.