Home Finance Review Part 2

Should the Anders family spend the maximum amount calculated on housing?

• Yes, because it is within their budget

• No, because they will have difficulty affording other things

• Yes, because the interest rate is favorable

• No, because the interest rate is too high

What is the Gross Debt Service Ratio (GDSR) for a person with a monthly mortgage payment of $1216, monthly property taxes of $125, monthly heating costs of $160, and a gross monthly income of $3200?

• A) 37.5%

• B) 49.7%

• C) 42.8%

• D) 50.3%

Will Lorenzo's loan application likely be approved if his GDSR is calculated to be over 32%?

• A) Yes, because a GDSR over 32% is acceptable.

• B) No, because a GDSR over 32% is not acceptable.

• C) Yes, but only if he has a good credit score.

• D) No, but he can reapply after improving his financial situation.

David's monthly mortgage payment is $925, and his monthly heating costs are $235. If his monthly property taxes are $235 and his gross monthly income is $3958, what is his GDSR?

• A) 34%

• B) 36%

• C) 38%

• D) 40%

Based on the GDSR, will David be approved for the home mortgage if his GDSR is above 32%?

• A) Yes, because his GDSR is within acceptable limits.

• B) No, because his GDSR is above the acceptable limit.

• C) Yes, if he provides additional collateral.

• D) No, but he can apply for a smaller loan amount.

Marcia's annual income is $52,500. If her monthly mortgage payment is $725, monthly property taxes are $262.50, and monthly heating costs are $215, what is her GDSR?

• A) 25.7%

• B) 27.5%

• C) 29.3%

• D) 30.1%

Will Marcia be approved for the home mortgage if her GDSR is below 32%?

• A) Yes, because her GDSR is below the acceptable limit.

• B) No, because her GDSR is above the acceptable limit.

• C) Yes, but she may need to provide a larger down payment.

• D) No, unless she increases her gross monthly income.

What is the Gross Debt Service Ratio (GDSR) for Jen and Joe if their monthly property taxes are $160, heating costs are $122, and mortgage payment is $1445 with a gross income of $5500 per month?

• A) 31.4%

• B) 32.0%

• C) 30.5%

• D) 33.1%

Why might Jen and Joe consider purchasing a less expensive house despite their GDSR being below 32%?

• A) Because they have trouble budgeting for their other expenses.

• B) Because they want a larger house.

• C) Because their GDSR is significantly higher than 32%.

• D) Because their monthly income is too low.

What is Mr. Reid's Gross Debt Service Ratio if his monthly mortgage payment is $1524, property taxes are $2220 annually, heating costs are $195 monthly, and his gross monthly income is $5125?

• A) 35.15%

• B) 37.15%

• C) 36.15%

• D) 34.15%