Applying for a Loan Answers

Johnny’s monthly expenses and income are listed below. Calculate Johnny’s debt-to-income (DTI) ratio. Johnny's Monthly Debt and Income Housing: Rent $950.00 Renter's Insurance $25.00 Credit: Student $250.00 Car $239.00 Credit Card #1 $25.00 (minimum) Credit Card #2 $40.00 (minimum) Income: Sales Rep $4,400.00 Tutoring $600.00 a. 28% b. 33% c. 31% d. 35% Please select the best answer from the choices provided

Jim has an annual salary of $96,000. His monthly expenses include a $2,500 mortgage payment, a $250 lease payment, $500 in minimum credit card payments, and a $425 payment on his speed boat. He also receives $1,200 in interest from his savings and other accounts each month. Calculate Jim’s DTI (debt-to-income) ratio.a.30%b.35%c.40%d.45%

Which of the following is something you would not expect to see on a basic loan application?a.employer’s name and addressb.doctor’s name and addressc.annual or monthly incomed.current monthly rent or mortgage payment

Trish is having trouble understanding why she was not approved for her loan. Which of the following probably kept Trish from getting her loan? a. Trish's debt-to-income (DTI) is currently 30%. b. Trish's credit score is 525. c. Trish is a single mom with three kids. d. Trish's gross monthly income is only $2,800. Please select the best answer from the choices provided

Collateral can be beneficial for borrowers when applying for a loan by __________.a.offering lenders additional financial gain if borrowers defaults on their loansb.lessening the total loan amount, making it easier for borrowers to be approvedc.giving lenders protection against financial loss and more reason to approve loansd.demonstrating that borrowers have ownership of high-end goods and can obviously make their loan payments

Joey would like to apply for a loan but knows that his high debt-to-income (DTI) ratio will probably get in his way. He would like to lower his DTI ratio by lowering the amount of his gross monthly income that goes to living expenses. Joey's current monthly expenses include a rent payment of $1,100, a $178 car payment, and a combined minimum payment of $220 for his credit card debt. His current gross monthly income is $3,600. If Joey moves to a new apartment, what is the maximum monthly rent payment he can make and still maintain a DTI ratio of 36%?a.$702b.$898c.$922d.$960

If denied a loan, which of the following changes to your application process will not increase your chances of approval when you re-apply?a.Apply for a larger loan amount.b.Increase your gross monthly income.c.Have a cosigner apply for the loan with you.d.Eliminate some of your debt before you re-apply.

Cindy would like to apply for a loan but knows that her debt-to-income (DTI) ratio will keep her from being approved. Her monthly expenses include an $800 rent payment, a $230 car payment, a $175 student loan payment and a $160 minimum payment for all three of her credit cards combined. Her current gross monthly income is $2,900.What minimum additional gross monthly income does Cindy need to get her DTI down to 36%?a.$252.78b.$405.56c.$447.22d.$891.67

How would a bigger down payment be beneficial to borrowers?a.A bigger down payment is only beneficial for a person applying for a home loan.b.A bigger down payment is essentially a bribe to the dealership, guaranteeing a few extra bells and whistles for free.c.A bigger down payment means that the borrower has more money, and can afford a bigger loan. d.A bigger down payment is money paid toward principal, interest free, which also decreases the amount paid monthly.

In order to approve a loan, lenders want to see a credit score of at least _____.a.300b.500c.700d.1200