Mortgage Agent Licensing Practice Exam · Question
A mortgage applicant has an annual gross income of $70,000. Their annual principal and interest payments are $15,000, annual property taxes are $3,000, and annual heating costs are $1,200. What is their GDS ratio?
The GDS ratio is calculated as (Annual Principal + Interest + Property Taxes + Heating Costs) / Annual Gross Income. In this case, ($15,000 + $3,000 + $1,200) /
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Question: A mortgage applicant has an annual gross income of $70,000. Their annual principal and interest payments are $15,000, annual property taxes are $3,000, and annual heating costs are $1,200. What is their GDS ratio?
Answer options:
- 25%
- 27.4% ✅ 29.1%
- 31.5%
Correct answer: 29.1%
Explanation: The GDS ratio is calculated as (Annual Principal + Interest + Property Taxes + Heating Costs) / Annual Gross Income. In this case, ($15,000 + $3,000 + $1,200) / $70,000 = $19,200 / $70,000 = 0.27428, or approximately 27.4%.
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Question explanations
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