Humber/Ontario Real Estate Course 2 Exam Practice

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Prepare for the Humber/Ontario Real Estate Course 2 Exam with our comprehensive quiz that covers essential concepts and topics. Enhance your understanding with multiple choice questions designed to test your knowledge and boost your confidence before the exam.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What is the GDS ratio if Buyer Asadi has a monthly PIT payment of $1,800 and an annual income of $67,000?

12.1%
32.2%
28.8%
22.5%
44.6%
35.5%

The correct answer is: 32.2%

The GDS (Gross Debt Service) ratio is a formula used by lenders to calculate the percentage of a borrower's gross income needed to cover all housing expenses. In this case, the formula for GDS ratio is (Monthly PIT payment / Monthly Gross Income) x 100. Given that Buyer Asadi has a monthly PIT payment of $1,800 and an annual income of $67,000, we first need to convert the annual income to monthly income by dividing $67,000 by 12 (months) to get $5,583.33. Then, we can plug in the values into the formula: (1,800 / 5,583.33) x 100 ≈ 32.2% Therefore, the GDS ratio for Buyer Asadi is 32.2%, making choice B the correct answer.