6.7 Applying for a Loan Answers

Which of the following is likely to keep Harry from being approved for a loan?a.Harry's debt-to-income is a stable 39%.b.Harry's credit score currently sits at 702.c.Harry has a gross monthly income of $3800.d.Harry was able to offer his vacation home as collateral for the loan.

Kurtis is expecting a promotion which, hopefully, comes with a raise. He would like his raise to help him correct a high debt-to-income (DTI) ratio of 43%. His current annual salary is $53,000. How much of a raise would Kurtis need applied to his annual salary to get his DTI ratio down to a more reasonable 36%?a.$4,437 b.$8,627c.$10,305d.$63,305

Bob would like to get his debt-to-income (DTI) ratio down to 36%. His current monthly expenses are outlined in the chart below. He would like to lower his DTI by paying off some of his credit card debt, lowering his combined minimum monthly credit card payment. What would Bob's minimum monthly credit card payment need to be in order to reach his DTI goal of 36%?Bob's Monthly Debt and Income Housing:Mortgage$1,250.00 (including mortgage insurance and property taxes) Credit:Auto Loan$349.00 Credit Cards (combined)$348.00(minimum) Income:Manager$4,800.00 Interest$130.00 a.$175.80b.$129.00c.$228.00d.$274.80

Trudy’s monthly expenses are outlined in the chart below. Trudy’s job pays her $36,000 annually. Determine Trudy’s DTI (debt-to-income) ratio.Trudy's Debt and IncomeIncome:$36,000 (annually)Rent:$695 (monthly)Car Payment$265 (monthly)Student Loan$200 (monthly)Credit Cards$160 (monthly)a.28%b.35%c.37%d.44%

Sally spends $1,500 each month on her mortgage, mortgage insurance and property taxes. She has three credit cards with minimum monthly payments that total to $125.00 and a monthly car payment for $349.00. She currently brings in a gross monthly income of 3,750.00 from her job. Calculate Sally’s debt-to-income (DTI) ratio.a.40%b.43%c.49%d.53%

Lenders look at the credit score of a loan applicant in order to _____.a.verify the applicant’s annual gross incomeb.ensure that the applicant is financially responsible c.ensure that the applicant’s credit score is as high as possibled.see what types of loans the applicant has applied for in the past

Gina would like to apply for a loan, but knows that her current debt-to-income (DTI) ratio will keep her from being approved. Her current monthly debt includes a rent payment of $950.00, a car payment of $238.00, a student loan payment of $149.00, and two credit cards with a combined minimum monthly payment of $78.00. The bank requires a DTI of 36% in order to approve Gina?s loan application. What would Gina's gross monthly income need to be to get approved for the loan?a.at least $2,855.56b.at least $2,638.89c.at least $3,713.89d.at least $3,930.56

Susan just got a promotion that increased her annual salary from $52,000 to $68,000. Susan's monthly expenses included a mortgage payment of $1,500, three minimum credit card payments that total $350, a lease payment of $280, a student loan payment of $250, and a personal loan payment of $325. How did Susan's debt-to-income ratio change with her promotion?a.Susan's debt-to-income ratio decreased by about 2%.b.Susan's debt-to-income ratio increased by about 2%.c.Susan's debt-to-income ratio decreased by about 15%.d.Susan's debt-to-income ratio increased by about 15%.

Tom was recently turned down for a loan. He would like to re-apply next year for the same loan. Which of the following is not a change he could make to increase his chances of being approved for the loan?a.Pay off some of his credit cards to decrease his debt-to-income ratio.b.Take out some more credit cards to increase his monthly debt.c.Find another job that pays more, increasing his gross monthly income.d.Improve his credit score by making all credit card and loan payments on time.

A lender will verify and carefully consider your income before approving you for a loan because _____.a.they need to be sure you will be able to pay the loan backb.government restrictions require a minimum salary to be approved for a loanc.loan applicants with higher salaries are generally more trustworthy than other applicantsd.they need to be sure you make at least the minimum payment for the loan you applied for