Bob and Mary Kay Have Gross Household Income of $7,000

Bob and Mary Kay have gross household income of $7,000 per month.They both have great credit scores and the home they are interested in buying appraised higher than the selling price.They have combined monthly debt payments of $300 in student loans,$650 in car loans,and they pay their credit cards in full every month.The PITI on the new home will be $1,800 per month.Before they pay the $250 loan application fee,they are asking you for your opinion on whether they will get approved for a mortgage.What will you advise them?

A) Based on the 28 percent rule they can afford the $1,800 PITI and will be approved for the mortgage.
B) Based on the 28 percent rule they cannot afford the $1,800 PITI and will be denied the mortgage.
C) Based on the 36 percent rule they will be approved for the mortgage.
D) Based on the 36 percent rule they have too much other debt and will be denied the mortgage.