Diana is purchasing a co-op for $900,000 with a 75% share loan. The monthly maintenance fee is $1,850, and her share loan payment will be $3,200 per month. If the co-op board requires a maximum debt-to-income ratio of 30%, what minimum monthly gross income must Diana have to qualify?
Correct Answer
A) $16,833
Total monthly housing payment = $3,200 (loan) + $1,850 (maintenance) = $5,050. Required income = $5,050 ÷ 0.30 = $16,833.33, rounded to $16,833. The debt-to-income ratio includes both loan payments and maintenance fees.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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