Many Lenders Use the 28/36 Rule in Evaluating Mortgage Applications

question 63

Multiple Choice

Many lenders use the 28/36 rule in evaluating mortgage applications.If your mortgage payment itself is 28% of your gross income,that means that the remainder of your monthly debt must be ________% or less.

• A)6
• B)7
• C)8
• D)28
• E)36

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Definitions:

Interest Rates

The cost of borrowing money or the return on investment for savings, often expressed as a percentage.

Revenue Announcement

Revenue announcement refers to a company publicly disclosing its revenue figures for a specific period, which can impact its stock price and investor perception.

Informationally Efficient

A market characteristic where prices fully reflect all available information, making it impossible to consistently achieve higher returns.

Random Walk

A theory suggesting that stock market prices evolve according to a random path and are therefore unpredictable.