Finance
The 'debt-to-income ratio' (DTI) used by New York mortgage lenders measures:
AThe borrower's total assets divided by total liabilities
BThe borrower's monthly debt payments (including the proposed mortgage) as a percentage of gross monthly income✓ Correct
CThe loan amount as a percentage of the property's appraised value
DThe borrower's credit score relative to the industry average
Explanation
DTI (debt-to-income ratio) is the percentage of a borrower's gross monthly income that goes toward paying monthly debt obligations (including the proposed PITI mortgage payment, car loans, student loans, etc.). Lenders use DTI as a key qualification metric; conventional loans typically require a DTI of 43% or less.
Related New York Finance Questions
- Pre-qualification for a mortgage differs from pre-approval in that:
- A New York co-op purchase is typically financed differently from a house purchase because:
- The Home Mortgage Disclosure Act (HMDA) requires lenders to:
- In New York, RESPA Section 9 prohibits sellers from:
- In New York, an FHA (Federal Housing Administration) mortgage loan is insured by the federal government, which means:
- An adjustable-rate mortgage (ARM) typically offers:
- Seller concessions in a real estate transaction refer to:
- A purchase-money mortgage is one in which:
Practice More New York Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New York Quiz →