A lender uses a 28% housing expense ratio. If a borrower has a gross monthly income of $7,500, what is the maximum allowable monthly housing payment?
Correct Answer
C) $2,100
$7,500 × 0.28 = $2,100. The 28% front-end (housing expense) ratio is the maximum percentage of gross monthly income a borrower may spend on housing costs.
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Related Topics & Key Terms
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