Gross monthly qualifying income is $7,500, proposed monthly PITI is $2,025, and all other counted monthly debt is $600. There are no additional housing charges. What are the housing-expense and total debt-to-income ratios?
Correct Answer
D) 27% housing and 35% total DTI
D. Housing is 27%; total DTI is 35%. Housing: $2,025 ÷ $7,500 × 100 = 27%. Total counted debt: $2,025 + $600 = $2,625. Divide by $7,500 to obtain 35%. Scope and exceptions: All qualifying income and counted debts are supplied, with no additional housing charges. These ratios alone do not establish approval. Source: B3-6-02, DTI Ratios — https://selling-guide.fanniemae.com/sel/b3-6-02/debt-income-ratios
Why This Is the Correct Answer
D. Housing is 27%; total DTI is 35%. Housing: $2,025 ÷ $7,500 × 100 = 27%. Total counted debt: $2,025 + $600 = $2,625. Divide by $7,500 to obtain 35%. Scope and exceptions: All qualifying income and counted debts are supplied, with no additional housing charges. These ratios alone do not establish approval.
Why the Other Options Are Wrong
Option A: 35% housing and 27% total DTI
The housing and total ratios are reversed.
Option B: 27% housing and 8% total DTI
8% counts only the other debt and leaves out housing.
Option C: 35% housing and 43% total DTI
It incorrectly uses total debt as housing and adds the other debt again.
Exam Tip
The back-end numerator includes housing plus other counted obligations.
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