Real Estate Math
A Colorado buyer wants to qualify for a $320,000 mortgage. The lender requires a maximum front-end ratio of 28%. The monthly payment (PITI) is $2,100. What minimum monthly gross income is required?
A$5,880
B$6,500
C$7,500✓ Correct
D$8,400
Explanation
Front-end ratio = PITI ÷ Gross Monthly Income. $2,100 ÷ 0.28 = $7,500 minimum gross monthly income. To solve this, multiply the relevant values: $320,000 and $2,100 at 28%.. The correct answer is $7,500.. This is a common calculation on the Colorado real estate exam.
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