Question

A prospective borrower has an estimated monthly housing expense of $486, and his monthly obligations total $684. If the borrower's monthly gross income is $1,950, what is the total obligations ratio?

Answer 1

TOR = 0.350

Step-by-step explanation:

Data provided;

Estimated monthly housing expenses = $ 486

Total monthly obligations = $ 684

The monthly gross income of the borrower = $ 1,950

Now,

the total obligation ratio is calculated as:

Total obligation ratio (TOR) = (Total monthly obligations) / (The monthly gross income of the borrower)

on substituting the values, we get

TOR = $ 684 / $ 1,950

or

TOR = 0.350