The debt-to-income (DTI) ratio used by lenders in Arizona measures:
Why The percentage of monthly gross income that goes toward monthly debt payments Is Correct
Answer B: The percentage of monthly gross income that goes toward monthly debt payments
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
People Also Study
Related Arizona Questions
- A buyer's monthly gross income is $7,500. Using a 28% front-end (housing) ratio, what is the maximum PITI payment they can afford?Real Estate Math
- A lender requires a maximum 43% debt-to-income (DTI) ratio. A borrower has monthly debt payments of $750 and gross monthly income of $5,800. Can they add a mortgage payment of $1,200?Real Estate Math
- Private mortgage insurance (PMI) is typically required on a conventional loan in Arizona when the loan-to-value (LTV) ratio exceeds:Finance
- Debt-to-income (DTI) ratio in Arizona mortgage underwriting compares:Finance
- An Arizona broker has gross commission income of $480,000. They pay $192,000 to agents as commission splits. What percentage of gross income did agents receive?Real Estate Math
- In Arizona, the 'gross income multiplier' (GIM) at the annual level is used differently from the GRM (gross rent multiplier) in that:Property Valuation
- An Arizona buyer takes out a $350,000 mortgage at 6.75% for 30 years. The monthly payment factor is $6.49 per $1,000. What is the total interest paid over the life of the loan?Real Estate Math
- The 'debt-to-income ratio' (DTI) that most conventional lenders use as a maximum for qualified mortgages is approximately:Finance
Key Terms to Know
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
Study This Topic
Practice More Arizona Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →