Suppose you earn a gross income of $$ \$ 2,730 $$ per month and apply for a mortgage with a monthly PITI of $$ \$ 510.51 $$. You have other financial obliga totaling $$ \$ 431.34 $$ per month. (Use the ratio guidelines on page 468 .) What type of mortgage, if any, would you qualify for? Select one:

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1. Compute the front‐end ratio (housing expense ratio):

$$
   \text{Front-end ratio} = \frac{\text{PITI}}{\text{Gross Income}} = \frac{510.51}{2730} \approx 0.187 \text{ or } 18.7\%
   $$

2. Compute the back‐end ratio (total debt-to-income ratio):

$$
   \text{Back-end ratio} = \frac{\text{PITI} + \text{Other Obligations}}{\text{Gross Income}} = \frac{510.51 + 431.34}{2730} = \frac{941.85}{2730} \approx 0.345 \text{ or } 34.5\%
   $$

3. Compare to the typical guidelines (approximately 28% for the front-end ratio and 36% for the back-end ratio):

- Since $$18.7\% < 28\%$$, the housing expense is within acceptable limits.
   - Since $$34.5\% < 36\%$$, the total debt obligations are also within acceptable limits.

Since both ratios fall below the recommended limits, you would qualify for the mortgage.

Select: Conventional mortgage.
You qualify for a conventional mortgage.

Suppose you earn a gross income of per month and apply for a mortgage with a monthly PITI of . You have other financial obliga
totaling per month. (Use the ratio guidelines on page 468 .) What type of mortgage, if any, would you qualify for?
Select one:

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Suppose you earn a gross income of per month and apply for a mortgage with a monthly PITI of . You have other financial obliga totaling per month. (Use the ratio guidelines on page 468 .) What type of mortgage, if any, would you qualify for? Select one: