angiarelyz47
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Mandy has an annual salary of $37,580. Each month she has a car payment of $265 and a student loan of $120. If
she applies for a home loan, how likely is it Mandy 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.

Respuesta :

divorcedspiderman

C. Not likely, recurring debt is higher than what is allowed.

edge 2021

Mandy's approval based on her debt - to - income ratio is;

C: Not likely, recurring debt is higher than what is allowed.

What is Debt to income ratio?

Debt to income ratio is simply the percentage of your gross monthly income that goes to paying your monthly debt payments.

Now, her annual salary is $37,580. This means that her monthly income is; 37580/12 = $3131.67

Her monthly debt servicing = $265 + $120 =$385

Using the 28/36 ratio, the maximum allowable recurring debt for someone with a monthly income of $3,200 is $256.

Since her recurring monthly debt is $385 it is more than the maximum recurrent limit and so her home loan will not be approved.

Read more about debt - to - income ratio at; https://brainly.com/question/24814852