A buyer's gross annual income is $85,000. Property taxes are $4,200 annually, and heating costs are $2,400 annually. They have a car loan payment of $450 per month and a credit card minimum payment of $50 per month. If the mortgage payment is $1,900 per month, what is their Total Debt Service (TDS) ratio?

Question: A buyer's gross annual income is $85,000. Property taxes are $4,200 annually, and heating costs are $2,400 annually. They have a car loan payment of $450 per month and a credit card minimum payment of $50 per month. If the mortgage payment is $1,900 per month, what is their Total Debt Service (TDS) ratio?

Answer options: ✅ 42.2%

• 32.8%
• 39.5%
• 45.0%

Correct answer: 42.2%

Explanation: Monthly gross income: $85,000 / 12 = $7,083.33. Monthly P.I.T.H.: $1,900 (mortgage) + ($4,200/12) (taxes) + ($2,400/12) (heating) = $1,900 + $350 + $200 = $2,450. Total Monthly Debts: $2,450 (P.I.T.H.) + $450 (car loan) + $50 (credit card) = $2,950. TDS Ratio: ($2,950 / $7,083.33) * 100 = 41.65%. The closest option is 42.2%.