Principal,interest,and property taxes on a mortgage are $1209,with heating costs of $68 and condo fees of $180 monthly.The borrower also has a student loan with $100 monthly payments.If the gross debt service ratio required is 30 percent,what will be the lowest monthly income that will qualify for the mortgage financing?

Question

Quizplus · Accepted Answer

The gross debt service ratio (GDS) is calculated by dividing the total housing costs by the borrower's gross monthly income. The total housing costs include the mortgage payments, heating costs, and condo fees, which sum up to $1209 + $68 + $180 = $1457. To find the lowest monthly income that qualifies, divide the total housing costs by the GDS ratio: $1457 / 0.30 = $4857. However, the student loan is not included in the GDS calculation, so the correct answer is $4857.

Principal,interest,and Property Taxes on a Mortgage Are $1209,with Heating Costs