ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Character
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Capacity
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Conditions
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Credit Freeze
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Detailed explanation-1: -Capacity measures the borrower’s ability to repay a loan by comparing income against recurring debts and assessing the borrower’s debt-to-income (DTI) ratio. Lenders calculate DTI by adding a borrower’s total monthly debt payments and dividing that by the borrower’s gross monthly income.
Detailed explanation-2: -The financial ability to repay a loan with present income is known as capacity. Before lending you money, creditors want to make certain that your income is sufficient to cover your current expenses each month plus the payments on the new loan.
Detailed explanation-3: -Capacity: This refers to your ability to repay the debt.
Detailed explanation-4: -Your debt-to-income ratio (DTI) is all your monthly debt payments divided by your gross monthly income. This number is one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow. Different loan products and lenders will have different DTI limits.
Detailed explanation-5: -What are the Basic Ability-to-Repay Requirements? The ATR/QM rule requires you to make a reasonable, good-faith determination that a member has the ability to repay a covered mortgage loan before or when you consummate the loan. More items