Question

Utilizing the 28/36 rule, if Rebeccas gross income if 4,500 month, she would need to spend less than _ in housing costs a month to qualify for most loans

A. 1,200
B. 1,260
C. 1,728
D. 15,000

Answer 1

Rebecca would need to spend less than $1,260 in housing costs per month to qualify for most loans.

Step-by-step explanation:

The 28/36 rule is a common guideline used by lenders to determine how much of a borrower's income can be allocated towards housing costs and total debt. According to this rule, a borrower's housing costs should be less than 28% of their gross income, and their total debt payments (including housing costs) should be less than 36% of their gross income.

If Rebecca's gross income is $4,500 per month, she would need to spend less than $1,260 (28% of $4,500) in housing costs per month to qualify for most loans.

Therefore, the correct answer is B. 1,260.