Principal, interest, and property taxes on a mortgage are $1209, with heating costs of $68 and a condo fee 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 is calculated by dividing the total housing costs by the borrower's gross monthly income. The total housing costs are $1209 (mortgage) + $68 (heating) + $180 (condo fee) = $1457. To find the lowest monthly income, divide $1457 by 0.30 (30%), which equals $4857.

Principal, Interest, and Property Taxes on a Mortgage Are $1209