Assuming a PITI of approximately $1,300 for the townhouse,will they be approved for a mortgage?
A)No,based on the amount of their existing debt they will not be approved.
B)No,based on the 28 percent rule they will not be approved.
C)Yes,based on the 36 percent rule they will be approved.
D)Yes,based solely on their combined income they will be approved.

Question

Quizplus · Accepted Answer

The 36 percent rule states that the total debt-to-income ratio should not exceed 36 percent. Assuming a PITI of approximately $1,300, the couple's monthly debt payments would be $1,800 ($500 in car payments + $1,300 in PITI). This means their gross monthly income should be at least $5,000 ($1,800 divided by 0.36). If their combined income is greater than $5,000, they would be approved for a mortgage. Therefore, option C is correct.

Assuming a PITI of Approximately $1,300 for the Townhouse,will They