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 gross debt service ratio if the buyer's annual income is $75,000 and the monthly PIT payment is $1,750?

32.5%
28%
43%
31%
25%
36%

The correct answer is: 28%

The gross debt service ratio (GDS) is calculated by dividing the total annual housing costs by the buyer's annual income and then multiplying by 100 to get a percentage. In this case, the monthly PIT (principal, interest, and taxes) payment is $1,750. To calculate the total annual housing costs, you would multiply $1,750 by 12 (months) to get $21,000. Next, you would divide the total annual housing costs ($21,000) by the buyer's annual income ($75,000) and then multiply by 100 to convert to a percentage. Therefore, the GDS ratio would be ($21,000 / $75,000) * 100 = 28%. This makes option B the correct answer. The other options are not correct as they do not reflect the accurate calculation of the gross debt service ratio based on the given information.