A lender uses a 28% front-end qualifying ratio. If a borrower's gross monthly income is $6,000, what is the maximum allowable monthly housing payment?
Correct Answer
B) $1,680
To find the maximum allowable monthly housing payment, multiply the borrower's gross monthly income by the front-end ratio: $6,000 × 0.28 = $1,680.
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A lender uses a 28% front-end qualifying ratio. If a borrower's gross monthly income is $5,200, what is the maximum allowable monthly housing payment?
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