Question

Which of the following would least likely have a negative impact on determining eligibility for a home loan?
a.
increasing a credit card limit
b.
losing money in investments
c.
making late car payments
d.
taking a new job with higher pay

You work for a lender that requires a 20% down payment and uses the standard debt-to-income ratio to determine a person’s eligibility for a home loan. Of the following, choose the person that you would rate the highest on their eligibility for a home loan.

Person A
Person B
Person C
Person D
home value
$175,000
$200,000
$220,000
$250,000
income
$51,000
$58,000
$63,000
$67,000
savings
$35,000
$40,000
$42,000
$50,000
recurring debt
$350
$250
$200
$450

a.
Person A
b.
Person B
c.
Person C
d.
Person D

Answer 1

1) d. taking a new job with higher pay — higher income generally improves eligibility (late payments or losses hurt credit/assets; higher credit limits are neutral/possibly beneficial but not as clearly positive).

2) b. Person B — meets the 20% down requirement and has the lowest debt-to-income burden of the applicants who can make the down payment.