you work for a lender that requires a 15% down payment and uses the standard debt - to - income ratio to…

you work for a lender that requires a 15% down payment and uses the standard debt - to - income ratio to determine a persons eligibility for a home loan. of the following, choose the person that you would rate the highest on their eligibility for a home loan.\n| |person a|person b|person c|person d|\n|--|--|--|--|--|\n|home value|$95,000|$107,000|$120,000|$128,000|\n|income|$46,000|$53,000|$58,000|$60,000|\n|savings|$20,000|$13,910|$18,000|$19,200|\n|recurring debt|$310|$198|$265|$400|\na. person a\nb. person b\nc. person c\nd. person d

you work for a lender that requires a 15% down payment and uses the standard debt - to - income ratio to determine a persons eligibility for a home loan. of the following, choose the person that you would rate the highest on their eligibility for a home loan.\n| |person a|person b|person c|person d|\n|--|--|--|--|--|\n|home value|$95,000|$107,000|$120,000|$128,000|\n|income|$46,000|$53,000|$58,000|$60,000|\n|savings|$20,000|$13,910|$18,000|$19,200|\n|recurring debt|$310|$198|$265|$400|\na. person a\nb. person b\nc. person c\nd. person d

Answer

Explanation:

Step1: Calculate down - payment for each person

The down - payment is 15% of the home value. For Person A: $0.15\times95000 = 14250$ For Person B: $0.15\times107000=16050$ For Person C: $0.15\times120000 = 18000$ For Person D: $0.15\times128000=19200$

Step2: Check if savings can cover down - payment

Person A: Savings = 20000, Down - payment = 14250 (Savings > Down - payment) Person B: Savings = 13910, Down - payment = 16050 (Savings < Down - payment) Person C: Savings = 18000, Down - payment = 18000 (Savings = Down - payment) Person D: Savings = 19200, Down - payment = 19200 (Savings = Down - payment) Since Person B cannot cover the down - payment with savings, we exclude Person B.

Step3: Calculate debt - to - income ratio for remaining persons

Debt - to - income ratio = $\frac{\text{Recurring debt}}{\text{Income}}\times100$ For Person A: $\frac{310}{46000}\times100\approx0.67%$ For Person C: $\frac{265}{58000}\times100\approx0.46%$ For Person D: $\frac{400}{60000}\times100\approx0.67%$ Since Person C has the lowest debt - to - income ratio among those who can afford the down - payment.

Answer:

c. Person C