Finance
A Vermont borrower's gross monthly income is $7,500. Their proposed monthly housing costs (principal, interest, taxes, insurance) total $2,100. What is their front-end debt-to-income ratio?
A21%
B28%✓ Correct
C36%
D43%
Explanation
Front-end DTI = Housing costs ÷ Gross monthly income = $2,100 ÷ $7,500 = 0.28 = 28%. This is the housing ratio, which many conventional lenders prefer to be 28% or lower.
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