Mortgage Agent Licensing Practice Exam · Question
Emily earns $75,000 annually. She is applying for a mortgage with a monthly principal and interest payment of $2,000. Her monthly property taxes are $250, and monthly heating costs are $100. She has no other debts. What is the maximum acceptable Gross Debt Service (GDS) ratio for her application to meet lender guidelines (typically 32%)?
The maximum acceptable GDS ratio is typically 32%. Her current GDS is ($2,000 + $250 + $100) / ($75,000 / 12) = $2,350 / $6,250 = 37.6%. This means her current
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Question: Emily earns $75,000 annually. She is applying for a mortgage with a monthly principal and interest payment of $2,000. Her monthly property taxes are $250, and monthly heating costs are $100. She has no other debts. What is the maximum acceptable Gross Debt Service (GDS) ratio for her application to meet lender guidelines (typically 32%)?
Answer options: ✅ 32.0%
- 36.0%
- 38.5%
- 42.0%
Correct answer: 32.0%
Explanation: The maximum acceptable GDS ratio is typically 32%. Her current GDS is ($2,000 + $250 + $100) / ($75,000 / 12) = $2,350 / $6,250 = 37.6%. This means her current GDS exceeds the 32% guideline, but the question asks for the maximum acceptable, which is 32%.
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