A borrower earns $9,200 a month, carries $1,150 in other debts, and the proposed PITI is $2,760. The program caps total debt at 43%. What is the total debt-to-income ratio, and does it meet the stated 43% cap?
Correct Answer
D) Total debt is 42.5%, inside the cap, so the file clears on this test
Adding $2,760 and $1,150 gives $3,910 against $9,200, which is 42.5% and just inside a 43% cap. Other choices: 30% counts only the housing payment, which is the front ratio rather than total debt; 45% would need roughly $4,140 of obligations; and residual income is a VA test that sits alongside the ratio rather than replacing it. See 12 CFR 1026.43(c)(7). Source: 12 CFR 1026.43(c)(7)
Why This Is the Correct Answer
Adding $2,760 and $1,150 gives $3,910 against $9,200, which is 42.5% and just inside a 43% cap. Other choices: 30% counts only the housing payment, which is the front ratio rather than total debt; 45% would need roughly $4,140 of obligations; and residual income is a VA test that sits alongside the ratio rather than replacing it. See 12 CFR 1026.43(c)(7). Source: 12 CFR 1026.43(c)(7)
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