Answered

Determine the accuracy of the following statements:

1. The housing ratio is used to determine how much of your net monthly income can be used to make the monthly mortgage payment plus all other existing debt payments.
A. True
B. False

2. A prequalification is a guarantee from the lender to loan you money.
A. True
B. False



Answer :

GinnyAnswer

Final answer:

The housing ratio guides income allocation for mortgage payments, and prequalification is an estimate, not a guarantee of loan approval.


Explanation:

True. The housing ratio determines how much of your net monthly income can be allocated towards mortgage and debt payments.

False. A prequalification is not a guarantee but an estimate from the lender of the mortgage amount you may qualify for.

Debt-to-Income Ratio: This ratio is crucial in mortgage qualification, limiting debt and mortgage payments to 43% of gross income.


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