1. You are being evaluated for a fully amortizing $375,000 loan with a fixed interest rate of 3.5% and a 30 year term. Additional housing related costs total $350 per month. Further assume your annual salary is $85,000 and the banks maximum Payment to Income ratio is 30%. Compute your Payment to Income ratio and state whether the loan would be approved or not (using only this ratio as the determining factor).
   1. 31.5%, No
   2. 36.5%, Yes
   3. 28.7%, Yes
   4. 0.29%, Yes
2. From the prior question, assume you have a total of $550 per month of other non housing related debts and that the banks maximum Total Obligations ratio is 35%. Based on the above housing costs and other debts, compute the Total Obligations ratio and state whether the loan would be approved or not (using only this ratio as the determining factor).
   1. 36.5%, No
   2. 28.7%, Yes
   3. 31.5%, Yes
   4. 0.29%, Yes

ONLY ANSWER QUESTION 2