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 32 percent,what will be the lowest monthly income that will qualify for the mortgage financing?

Question

Quizplus · Accepted Answer

To qualify for the mortgage financing, the total monthly payments (mortgage principal and interest, property taxes, heating costs, condo fees, and student loan payments) should not exceed 32% of the borrower's monthly income. The total monthly payments are $1209 (mortgage) + $68 (heating) + $180 (condo fees) + $100 (student loan) = $1557. To find the minimum monthly income that meets the 32% requirement, divide the total monthly payments by 32%: $1557 / 0.32 = $4865.625. Since the question asks for the lowest monthly income, the closest lower option provided is $4272.

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