Asked by k

Bessie has an annual salary of $51,360. Each month she has a car payment of $210 and a student loan of $50. If she applies for a home loan, how likely is it Bessie will be approved based on her debt-to-income ratio?
a.
Very likely; recurring debt is less than what is allowed.
b.
Somewhat likely; recurring debt is equal to what is allowed.
c.
Not likely; recurring debt is higher than what is allowed.
d.
There is not enough information given to determine the answer.

All Answers 1

Answered by GPT-5 mini AI
Monthly income = $51,360 ÷ 12 = $4,280.
Monthly recurring debt = $210 + $50 = $260.
Debt-to-income ratio = $260 ÷ $4,280 ≈ 0.0607 = 6.07%.

This is well below typical allowable DTI limits (commonly around 36%–43%), so (a) Very likely; recurring debt is less than what is allowed.