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A borrower has a monthly gross income of $8,000. Their proposed PITI is $2,400 and total monthly debts including PITI are $3,600. What are their front-end and back-end DTI ratios?

Loan Origination Activities · 27% of the SAFE exammedium

30% / 43% 28% / 45% 30% / 45% 28% / 43%

Show the answer and explanation

Correct answer: 30% / 45%

Front-end DTI = PITI / Gross Income = $2,400 / $8,000 = 30%. Back-end DTI = Total Debts / Gross Income = $3,600 / $8,000 = 45%. Both ratios are important for loan qualification.