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Marianne earns a gross income of per month and applies for a mortgage with a monthly PITI of . Mia has other financial obligations to
per month. (Use the ratio guidelines on page 468.) What type of mortgage, if any, would Mirianne qualify for?

Ask by Cervantes Lang. in the United States
Mar 21,2025

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Marianne qualifies for a mortgage because her debt-to-income ratio is below the required threshold.

Solución

To determine the type of mortgage Marianne would qualify for, we need to calculate her debt-to-income (DTI) ratio. The DTI ratio is calculated by dividing the total monthly debt payments by the gross income.
Given:
  • Marianne’s gross income: $5,500 per month
  • Monthly PITI (Principal, Interest, Taxes, and Insurance): $1,244
  • Other financial obligations: $829 per month
First, let’s calculate the total monthly debt payments:
Total monthly debt payments = Monthly PITI + Other financial obligations
Total monthly debt payments = $1,244 + $829
Total monthly debt payments = $2,073
Next, we calculate the DTI ratio:
DTI ratio = Total monthly debt payments / Gross income
DTI ratio = $2,073 / $5,500
Now, we can determine the type of mortgage Marianne would qualify for based on the DTI ratio.
Calculate the value by following steps:
  • step0: Calculate:

    The DTI ratio is approximately 0.3769.
According to the ratio guidelines on page 468, a DTI ratio of 0.3769 is below the threshold for a mortgage. Therefore, Marianne would qualify for a mortgage.

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Beyond the Answer

To determine the type of mortgage Marianne might qualify for, we need to calculate her debt-to-income ratios. Her total monthly obligations, including the proposed mortgage payment, would be . The front-end ratio, which is the percentage of income that goes toward the housing expense, is or 22.6%.
Meanwhile, the back-end ratio, which includes all debt obligations, is or 37.7%. Most lenders prefer a front-end ratio below 28% to 31% and a back-end ratio below 36% to 43%. Since Marianne’s front-end ratio is below 28% and her back-end is just a hair above 37.7%, she may qualify for a conventional mortgage, though she’s on the higher end of the acceptable scale.
This means Marianne could be well-positioned for a mortgage that fits her needs, allowing her to invest in her future home while keeping her financial health in check!

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