Question

A buyer is considering a house with a piti of $2,900/month, what must his/her annual income be to qualify if the lender uses a housing expense ratio of 29%? $10,000 $100,000 $120,000 there is insufficient information to answer the question

Answer 1

So you would need to set up a formula for this. 2,900 = .29(x)

Basically, 2,900 is 29% of what number.

To isolate x, divide both sides by .29 = 10,000

So the buyer would need to make 10,000 per month to qualify for the 29% rule. So their annual income would need to be 120,000