12-28Under VA Guidelines,if a Borrower Fails the Income Ratio Method

question 41

Multiple Choice

12-28.Under VA guidelines,if a borrower fails the income ratio method he or she may qualify if his or her excess residual income is:

• A) at least 20%
• B) at least 30%
• C) between 10 and 15%
• D) about 35%

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Definitions:

Social Security System

A government program that provides financial protection against economic risks (e.g., retirement, disability, unemployment) to its citizens.

Progressive Income Tax

A tax system in which the tax rate increases as the taxable amount increases, resulting in higher earners paying a larger percentage of their income in taxes than lower earners.

EBT Cards

Electronic Benefit Transfer cards used by state welfare departments to issue benefits, such as food stamps and cash assistance, electronically.

Income Redistribution

The transfer of income and wealth from certain individuals or groups to others through mechanisms such as taxes and social security.