Real Estate Math
A borrower's monthly principal and interest payment is $1,250. Their gross monthly income is $5,000. What is their front-end (housing) debt-to-income ratio?
A20%
B25%✓ Correct
C28%
D31%
Explanation
Front-end DTI = Housing Payment / Gross Monthly Income = $1,250 / $5,000 = 25%. Using the values given ($1,250, $5,000), apply the appropriate formula..
People Also Study
Related Ohio Questions
- A buyer's monthly housing expenses include: mortgage payment $1,400, property taxes $250, insurance $80. Their gross monthly income is $6,500. What is the front-end DTI?Real Estate Math
- In Ohio, which type of mortgage allows the borrower to pay only interest for a specified period, after which payments increase to include principal?Finance
- A 30-year mortgage for $200,000 at 7% has a monthly payment of approximately $1,331. After 12 months, roughly how much principal has been paid if interest was $13,952?Real Estate Math
- An Ohio buyer qualifies for a maximum monthly housing payment of $1,500. Taxes and insurance are $350/month. What is the maximum monthly P&I payment?Real Estate Math
- In Ohio, a borrower who loses their home at a sheriff's sale but the proceeds don't fully cover the loan balance may face:Finance
- The income capitalization approach is MOST appropriate for valuing which type of Ohio property?Property Valuation
- A buyer's loan has a balance of $180,000 at an annual interest rate of 6%. What is the monthly interest payment for the first month?Real Estate Math
- An Ohio property has a gross income of $50,000, a 10% vacancy loss, and operating expenses of $20,000. What is the NOI?Property Valuation
Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
Study This Topic
Practice More Ohio Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Ohio Quiz →