Sharry is interested in buying her first home.Currently her monthly gross income is $3,000.From this she makes a car payment of $240,a personal loan payment of $300 and a student loan payment of $85.Based on this information would a bank approve Sharry for a mortgage?

Question

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To determine if Sharry would be approved for a mortgage, we need to calculate her debt-to-income (DTI) ratio. To do this, we add up her monthly debt payments: $240 + $300 + $85 = $625. Then we divide that by her monthly gross income: $625 / $3,000 = 0.2083 or 20.83%. Most lenders prefer a DTI ratio of 43% or lower, so Sharry's DTI is within the limit. However, we also need to consider her credit score, employment history, and other factors that could affect her mortgage approval. Without this additional information, we cannot say for certain whether a bank would approve Sharry for a mortgage, but based on the information given, it's possible that she may not be approved.

Sharry Is Interested in Buying Her First Home