Finance
An Oregon buyer is told their debt-to-income ratio (DTI) is 45%. What does this mean for their conventional loan application?
AThey qualify easily for any loan amount
BTheir monthly debt obligations are 45% of their gross monthly income, which may exceed conventional loan guidelines✓ Correct
CThey have 45% equity in the property
DTheir down payment is 45% of the purchase price
Explanation
DTI ratio measures total monthly debt payments (including the proposed mortgage) as a percentage of gross monthly income. Conventional loan guidelines typically prefer total DTI below 43–45%.
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