Chapter 14.II, Problem 15RE

Use Exhibit 14-4, Lending Ratio Guidelines, on page 468 to answer the following questions:

a. Which of the applicants in Exercises 8-14 would not qualify for a conventional mortgage?

b. Which of the applicants in Exercises 8-14 would not qualify for any mortgage?

The mortgage business uses widely accepted guidelines for these ratios that should not be exceeded. The ratio guidelines are shown in Exhibit 14-4.

Mortgage Type	Housing Expense Ratio	Total Obligations Ratio
FHAConventional	$29\%$ $28\%$	$41\%$ $36\%$

The mortgage business uses widely accepted guidelines for these ratios that should not be exceeded. The ratio guidelines are shown in Exhibit 14-4.

	Applicant	MonthlyGrossIncome	Monthly PITI Expense	Other Monthly Financial Obligations	Housing Expense Ratio (%)	Total Obligations Ratio (%)
8.	Parker	$2,000	$455	$380	22.75	41.75
9.	Forman	$3,700	$530	$360
10.	Martin	$3,100	$705	$720
11.	Tajsich	$5,200	$1,300	$510
12.	Emerson	$2,900	$644	$290
13.	Jameson	$4,250	$1,150	$475
14.	Renquest	$6,725	$1,648	$580