Question

Part B – Gross Debt Service (GDS) and Total Debt Service (TDS) Ratios

The following information is to be used solve Questions 13 to 19 below

Jasmine and her spouse are considering purchasing a larger house for their growing family. Below is a summary of their current combined income and expenses.

Combined Salary (Net Annually)	$97,500	Monthly Mortgage Payment	$1,200
Master Card (minimum monthly payment)	$1,000	Utilities (Heath and Electricity)	$150
Car Loan Payment	$850	Cable TV	$50
Cell-Phone Plan	$100	Line of Credit (minimum monthly payment)	$200
Property Tax (annual)	$2,000

Question 16

Is this an acceptable GDS?

Question 16 options:

	Yes, it is below 32%
	No, it is below 32%
	Yes, it is above 10%
	No, it is above 10%
	None of the Above

Question 17

What are their monthly debt payments?

Question 17 options:

	$900
	$1,590
	$740
	$1,050
	None of the Above

Question 18

What is their Total Debt Service (TDS) Ratio?

Question 18 options:

	38.24%
	27.77%
	31.59%
	35.77%
	None of the Above

Question 19

Is this an acceptable TDS?

Question 19 options:

	Yes, it is below 40%
	No, it is below 40%
	Yes, it is above 20%
	No, it is above 20%
	None of the Above

Answer 1