Finance
In South Dakota mortgage lending, the debt-to-income (DTI) ratio measures:
AThe ratio of the loan amount to the property value
BThe percentage of the borrower's gross monthly income consumed by monthly debt payments✓ Correct
CThe interest rate relative to the borrower's income
DThe ratio of property taxes to income
Explanation
The debt-to-income (DTI) ratio is calculated by dividing the borrower's total monthly debt payments (including the proposed mortgage payment) by their gross monthly income. Lenders use DTI to assess the borrower's ability to manage monthly payments.
Related South Dakota Finance Questions
- In South Dakota, which of the following is the primary function of a 'mortgage servicer'?
- South Dakota charges which of the following state-level taxes on real estate transfers?
- A South Dakota lender offers a 'teaser rate' ARM at 2.5% for the first year, then adjusting annually. A borrower should be concerned about:
- A South Dakota commercial lender requires a 'personal guarantee' on a business real estate loan. This means:
- In South Dakota, which entity purchases conforming mortgages in the secondary market to provide liquidity to lenders?
- The Dodd-Frank Wall Street Reform Act created which consumer protection agency related to mortgage lending?
- What does 'PITI' stand for in a South Dakota mortgage payment?
- A South Dakota buyer is using a seller carryback (purchase money mortgage). This means:
Practice More South Dakota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free South Dakota Quiz →