Answer:
GDS ratio is 28.12% and is less than the maximum of 30%,hence Jane would be able to get the mortgage
Explanation:
The gross debt service ratio is a measure of the ease with which mortgage holders can repay their housing loan.It compares the yearly property obligations with the yearly income of the mortgage holder.
Gross Debt Service ratio=yearly obligations/yearly income
yearly obligations=property taxes+yearly mortgage repayment
property taxes is $6,900
mortgage repayment=pmt(rate,nper,-pv,fv)
rate is 9%
nper is the duration mortgage of 30 years
pv is the present value of mortgage
fv is future value of mortgage,it is not known,hence taken as zero
=pmt(9%,30,-99000,0)=$9,636.30
yearly obligations=$6,900+$9,636.30=$ 16,536.30
GDS = 16,536.30/58,800=28.12%
