A lender uses a 28% front-end qualifying ratio. If a borrower's gross monthly income is $5,500, what is the maximum allowable monthly housing payment?
Correct Answer
B) $1,540
Multiply the borrower's gross monthly income by the front-end ratio: $5,500 × 0.28 = $1,540. This is the maximum monthly housing payment (PITI) the lender will allow.
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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?
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