Finance
An Iowa homebuyer's gross monthly income is $5,500. The front-end (housing expense) ratio limit is 28%. What is the maximum allowable monthly housing payment?
A$1,320
B$1,430
C$1,540✓ Correct
D$1,650
Explanation
Maximum housing payment = Monthly gross income × Front-end ratio = $5,500 × 0.28 = $1,540. To solve this, multiply the relevant values: $5,500 at 28%.. The correct answer is $1,540.. This is a common calculation on the Iowa real estate exam.
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