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2 February, 16:10

A prospective borrower has an estimated monthly housing expense of $486, and his monthly obligations total $684. If the borrower's monthly gross income is $1,950, what is the total obligations ratio?

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  1. 2 February, 16:32
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    TOR = 0.350

    Explanation:

    Data provided;

    Estimated monthly housing expenses = $ 486

    Total monthly obligations = $ 684

    The monthly gross income of the borrower = $ 1,950

    Now,

    the total obligation ratio is calculated as:

    Total obligation ratio (TOR) = (Total monthly obligations) / (The monthly gross income of the borrower)

    on substituting the values, we get

    TOR = $ 684 / $ 1,950

    or

    TOR = 0.350
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