Real Estate Finance Practice Exam 2025 – Complete Study Resource

To determine how much monthly income Bryan and Carla need to qualify for their loan based on the qualifying ratios of 28% for housing expenses and 36% for total debt, we first need to calculate the necessary income for each ratio.

1. **Housing Expenses Ratio (28%)**: This indicates that no more than 28% of their gross monthly income can go towards housing costs, which in this case is the monthly payment of $1780.

- To find the necessary income based on this ratio, we use the formula:

\[

\text{Required Income for Housing} = \frac{\text{Monthly Payment}}{\text{Housing Expense Ratio}}

\]

- Plugging in the numbers:

\[

\text{Required Income for Housing} = \frac{1780}{0.28} \approx 6342.86

\]

2. **Total Debt Ratio (36%)**: This means that the total monthly debt payments, which include the housing payment and other debts (in this case, long-term debt of $630), should not exceed 36% of their gross monthly income.

- To determine the total monthly debt obligations:

\[

\text{