In home mortgage lending it is common for lenders to, Ask an Expert

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In home mortgage lending, it is common for lenders to specify a maximum housing cost (PITI) ratio of 28% to 33% of monthly gross income. Assume a housing cost ratio of 30% and the borrower qualification data below.

House Price 400,000

Down Payment 5% (20,000)

Loan amount 380,000

Loan Payment 6.50% 2,402

Taxes 400

Insurance 133

Montly Housing Cost 2935

Monthly Income Required 9784

What DCR is the lender effectively applying to the borrower?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92338443

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