Adrian would need to improve his credit score by at least 111 points to qualify for a $150,000 mortgage.
To determine how many points Adrian needs to improve his credit score to qualify for a $150,000 mortgage while keeping his mortgage payments within $12,000 annually, we must consider the relationship between credit scores and interest rates.
A lower credit score often leads to higher interest rates on loans, including mortgages. The difference in interest rates based on credit scores can affect the affordability of a mortgage within a specific budget. With a credit score of 564, Adrian might be offered higher interest rates compared to someone with a higher credit score.
Given Adrian's annual mortgage payment limit of $12,000, we can estimate the maximum annual payment by considering the typical mortgage interest rates. Assuming an interest rate around 4% for a 30-year fixed-rate mortgage, the maximum mortgage amount Adrian could afford annually is approximately $12,000.
To afford a $150,000 mortgage within his $12,000 annual payment limit, Adrian would need a lower interest rate, achievable with a better credit score. By increasing his credit score, he could qualify for a lower interest rate, allowing him to afford the larger mortgage while keeping his payments at or below $12,000 annually.
The exact points needed to improve his credit score depend on the specific interest rate offered for the $150,000 mortgage. However, to afford this larger mortgage within his payment limit, Adrian might need to increase his credit score by at least 111 points (as per typical interest rate fluctuations).
Therefore, the correct answer is D: At least 111 points, although precise calculations would require knowledge of the exact interest rate offered based on credit scores by lenders.