The total household income available is $3963.Mortgage payments including taxes,principal,and interest are $1189.In addition,there are condo fees of $126 and heating costs of $56 monthly and a car lease of $241.What is the gross debt service ratio?

Question

Quizplus · Accepted Answer

First, we need to find the total monthly expenses:

Mortgage payments: $1189
Condo fees: $126
Heating costs: $56
Car Lease: $241
Total monthly expenses: $1612

Next, we divide the total monthly expenses by the total household income available and multiply by 100 to get the gross debt service ratio:

GDS Ratio = (Total Monthly Expenses / Total Household Income) x 100
GDS Ratio = ($1612 / $3963) x 100
GDS Ratio = 40.67%

Therefore, the correct answer is B) 33.0 percent because GDS Ratio should only consider Mortgage payments including taxes, principal, and interest.

The Total Household Income Available Is $3963