Finance
The debt-to-income (DTI) ratio used in mortgage underwriting compares:
AThe property value to the loan amount
BThe borrower's monthly debt payments to gross monthly income✓ Correct
CThe loan amount to the appraised value
DAnnual income to annual property taxes
Explanation
The DTI ratio is calculated by dividing the borrower's total monthly debt obligations (including the proposed mortgage payment) by gross monthly income. Most conventional loans require a DTI below 43%–50%.
Related Wisconsin Finance Questions
- A Wisconsin buyer who agrees to purchase a property 'subject to' the existing mortgage:
- An assumable mortgage allows a qualified buyer to:
- Wisconsin's mortgage foreclosure process is a:
- Wisconsin uses which type of security instrument for residential mortgage loans?
- Private Mortgage Insurance (PMI) on a conventional loan is typically required until the borrower's equity reaches:
- Under the Home Mortgage Disclosure Act (HMDA), Wisconsin lenders must report mortgage data to help identify:
- What is the statutory redemption period for a residential mortgage foreclosure in Wisconsin?
- Private mortgage insurance (PMI) is typically required on a conventional Wisconsin loan when the LTV exceeds:
Practice More Wisconsin Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Wisconsin Quiz →