Finance
The 'debt-to-income ratio' (DTI) used in mortgage underwriting compares:
AA. The loan amount to the property value
BB. Monthly debt payments to gross monthly income✓ Correct
CC. The interest rate to the inflation rate
DD. Liquid assets to total debt
Explanation
DTI = Total monthly debt payments ÷ Gross monthly income. Lenders use DTI to assess a borrower's ability to manage monthly payments. Conventional loans typically require a back-end DTI of 43% or less.
Related Georgia Finance Questions
- The 'Qualified Mortgage' (QM) rule under Dodd-Frank requires lenders to verify a borrower's:
- An interest rate buydown at closing reduces the borrower's interest rate by:
- The debt-to-income (DTI) ratio used by lenders compares:
- A mortgage in which the borrower pays only interest for a set period before principal and interest payments begin is called a(n):
- A buyer in Georgia obtains a conventional loan requiring PMI. PMI is typically required when the down payment is less than:
- An interest rate cap on an ARM loan protects the borrower by:
- A construction loan is typically converted to a permanent mortgage:
- A Georgia USDA Rural Development loan is designed for:
Practice More Georgia Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Georgia Quiz →