Real Estate Math
A Pennsylvania home buyer's monthly gross income is $7,500. Using the 28% front-end ratio guideline, what is the maximum monthly PITI they should pay?
A$1,500
B$2,100✓ Correct
C$2,250
D$2,500
Explanation
Maximum PITI = Gross Monthly Income × Front-end Ratio = $7,500 × 28% = $2,100. This represents the maximum housing cost (principal, interest, taxes, insurance) that conventional lending guidelines suggest as affordable. Buyers with higher income stability or credit may qualify at higher ratios.
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