Finance
A Michigan buyer's debt-to-income ratio is used by lenders to:
ADetermine the required down payment amount
BAssess the borrower's ability to repay the loan✓ Correct
CSet the property's appraised value
DCalculate required private mortgage insurance
Explanation
Lenders use the debt-to-income (DTI) ratio to assess whether a borrower's income is sufficient to cover existing debts plus the proposed mortgage payment. Most conventional loans require DTI below 43-45%.
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