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Mortgage Agent Licensing Practice Exam · Question

Which of the following would generally be included in the calculation of an applicant's Total Debt Service (TDS) ratio?

The TDS ratio includes monthly housing costs (principal, interest, property taxes, and heating) and all other regular monthly debt payments (e.g., credit cards,

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Question: Which of the following would generally be included in the calculation of an applicant's Total Debt Service (TDS) ratio?

Answer options: ✅ Monthly property taxes

  • Monthly payments for a private school tuition
  • Annual property insurance premiums paid in a lump sum
  • Payments towards a line of credit with no current balance

Correct answer: Monthly property taxes

Explanation: The TDS ratio includes monthly housing costs (principal, interest, property taxes, and heating) and all other regular monthly debt payments (e.g., credit cards, car loans). Monthly property taxes are a direct component of housing costs and are therefore included. Private school tuition or a line of credit with no balance are not typically considered fixed monthly debt obligations for this calculation.

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