Which ratio measures all of a borrower's debt obligations, including housing costs?

The Total Debt Service Ratio (TDS) is the correct option because it encompasses all of a borrower's debt obligations, including housing costs such as mortgage payments, property taxes, heating, and any other debts the borrower has, like consumer loans or credit card payments. The TDS ratio indicates a borrower's overall financial health by assessing their ability to manage total debt payments in relation to their gross income.

This ratio is crucial for lenders, as it helps them determine if a borrower can comfortably manage their total debt load without overextending themselves financially. A low TDS ratio generally suggests that borrowers have a manageable level of debt relative to their income, making them more desirable candidates for mortgage approval.

In contrast, the Gross Debt Service Ratio (GDS) only accounts for housing-related costs, excluding other debts the borrower might have, which is why it does not provide a complete picture of a borrower's financial obligations. The Debt Service Coverage Ratio is mainly used in commercial real estate to assess the ability of a property to generate enough income to cover mortgage payments, and the Loan-to-Value Ratio focuses solely on the proportion of a loan to the value of the property being financed. Thus, while these other ratios are valuable in their contexts, they do not measure