What does GDS stand for in mortgage calculations?

GDS stands for Gross Debt Service, which is a critical metric used in mortgage calculations to assess a borrower’s ability to manage their housing-related debt. This calculation involves adding up all housing expenses, such as mortgage payments, property taxes, and heating costs, and then dividing that total by the borrower’s gross monthly income.

The Gross Debt Service ratio is commonly used by lenders to determine whether the borrower can comfortably afford their mortgage payments and other housing costs without overextending their finances. A GDS ratio above acceptable levels may signal to lenders that the borrower's housing expenses are too high relative to their income, potentially indicating a higher risk for default.

In contrast, other terms in the options refer to concepts that are not standard in mortgage calculations, such as Gross Delivery Service or General Debt Service, which are not recognized within the context of evaluating mortgage affordability.