Michael is purchasing a cooperative apartment in Queens. The co-op board requires a debt-to-income ratio of no more than 28% for the total monthly housing costs. If Michael's gross monthly income is $8,500, what is the maximum monthly housing payment the board will likely approve?
Correct Answer
C) $2,380
Maximum monthly housing payment = Gross monthly income × Maximum debt-to-income ratio = $8,500 × 28% = $8,500 × 0.28 = $2,380. Co-op boards often have strict financial requirements including debt-to-income ratios for total housing costs.
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