Crystal is considering purchasing a condo that will have monthly payments of $1,950 per month. Property taxes along with heating costs will total $400 per month. Her monthly credit card bills total $75 per month and car payments are $450 per month. If Crystal's gross monthly income is $7,500 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. Crystal's monthly debt obligations are $1,950 (condo) + $400 (taxes and heating) + $75 (credit card) + $450 (car) = $2,875. Her gross monthly income is $7,500. So, the TDSR = ($2,875 / $7,500) * 100 = 38.33%.

Crystal Is Considering Purchasing a Condo That Will Have Monthly