You work for a lending institution and are tasked with whether or not to approve a home loan, using the standard 28/36 ratio. The loan application is for $230,000. You see that the applicant has an annual salary of $83,000. The applicant also has a car payment of $315, a student loan of $140 and a boat loan of $96. How likely are you to approve the loan?

The applicant earns about $6,917 per month, and the car, student, and boat payments total $551 per month. Under the 36% limit, total monthly housing costs and debt payments should be no more than about $2,490, leaving roughly $1,939 for housing. But the loan amount of $230,000 alone does not tell us the monthly mortgage payment; the interest rate, loan term, and housing costs such as taxes and insurance are missing. So there is not enough information to determine whether the loan meets the 28/36 ratio.

AI-written and checked against the verified answer.