Using the standard 28/36 guidelines, if the maximum monthly mortgage payment allowed for someone applying for a home loan is $1,085, what is their annual income?

Under the 28/36 guideline, the mortgage payment should be no more than 28% of gross monthly income. Divide $1,085 by 0.28 to get a gross monthly income of $3,875, then multiply by 12: $3,875 × 12 = $46,500 annually. The correct choice is $46,500.

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