Ballard is considering purchasing a condo that will have monthly payments of $950 per month. Property taxes along with heating costs will total $375 per month. His monthly credit card bills total $200 per month and car payments are $700 per month. If Sally's gross monthly income is $6,000 per month, determine his Total Debt Service Ratio.

Question

Quizplus · Accepted Answer

The Total Debt Service Ratio (TDSR) is calculated by adding all monthly debt obligations and dividing by gross monthly income, then multiplying by 100 to get a percentage. Ballard's monthly debt obligations are $950 (condo) + $375 (property taxes and heating) + $200 (credit card bills) + $700 (car payments) = $2,225. Dividing this by his gross monthly income of $6,000 gives 0.370833, which when multiplied by 100 gives 37.08%.

Ballard Is Considering Purchasing a Condo That Will Have Monthly