Finance
A Connecticut buyer's loan officer calculates the buyer's 'front-end' (housing) DTI ratio. What does this ratio measure?
AThe ratio of total monthly debt payments to gross monthly income
BThe ratio of proposed monthly housing expenses (PITI) to gross monthly income✓ Correct
CThe buyer's total net worth compared to the purchase price
DThe loan amount compared to the property value
Explanation
The front-end (or housing) DTI ratio compares the proposed monthly housing expenses (principal, interest, taxes, insurance—PITI) to the borrower's gross monthly income. Lenders typically prefer a front-end DTI below 28-31% for conventional loans.
Related Connecticut Finance Questions
- A lender's loan-to-value (LTV) ratio is calculated by:
- A Connecticut buyer applies for a USDA Rural Development loan. To qualify, the property must be located:
- A Connecticut borrower's mortgage has a 'prepayment penalty' clause. Under the Dodd-Frank Act, prepayment penalties are restricted on:
- What is the primary purpose of the federal Truth-in-Lending Act (TILA/Regulation Z) in Connecticut mortgage lending?
- A 'blanket mortgage' covers:
- Connecticut's Home Ownership and Equity Protection Act (HOEPA) provisions relate to:
- A 'prepayment penalty' in a Connecticut mortgage loan penalizes the borrower for:
- A Connecticut borrower refinances a $300,000 mortgage at a lower rate. The main benefit is:
Practice More Connecticut Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Connecticut Quiz →