Final answer:
The couple can allocate up to 50% of their gross monthly income towards total housing expense plus all long-term debt payments under Fannie Mae and Freddie Mac guidelines.
Step-by-step explanation:
The correct answer is option Mathematics.
In order to determine how much of their gross monthly income can be allowed to cover total housing expense plus all long-term debt under Fannie Mae and Freddie Mac standard guidelines, we need to consider their debt-to-income ratio (DTI) limit.
For Fannie Mae, the maximum DTI limit is typically 50%. This means that total housing expense plus all long-term debt payments should not exceed 50% of the couple's gross monthly income.
In this case, the couple has a gross monthly income of $5,000. Assuming they have no other long-term debts, the maximum allowed total housing expense would be $2,500 (50% of $5,000).
Please note that individual circumstances may vary and it is advisable to consult with a mortgage lender or financial advisor for specific information tailored to your situation.
The correct answer is option Fannie Mae and Freddie Mac usually allow a maximum housing expense, including principal, interest, taxes, insurance (PITI), and any homeowner's association fees, to be between 28% to 31% of your gross monthly income.
For long-term debt obligations including the housing expense, the allowable percentage is commonly around 36% to 45% of your gross monthly income.
Therefore, for a couple with a gross monthly income of $5,000, the total amount allowed to cover housing expenses plus all long-term debt would typically range from $1,800 (which is 36%) to $2,250 (which is 45%). This range reflects the flexibility in guidelines depending on other factors such as credit score and cash reserves.