Humber/Ontario Real Estate Course 2 Exam Practice

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Prepare for the Ontario Real Estate Exam with our comprehensive Humber Course 2 Exam Practice quiz. Engage with multiple choice questions and detailed explanations, designed to help you excel.

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Determine Buyer McNeil's Gross Debt Service (GDS) ratio if his yearly gross income is $75,000, making annual principal and interest payments of $22,000, and annual tax payments of $2,500.

30.6%
33%
26%
29.3%

The correct answer is: 33%

The Gross Debt Service (GDS) ratio is calculated by dividing the total annual housing costs by the gross annual income, then multiplying by 100 to get a percentage. In this case, the total annual housing costs are the sum of annual principal and interest payments plus annual tax payments, which equals $22,000 + $2,500 = $24,500. To find Buyer McNeil's GDS ratio, divide the total annual housing costs of $24,500 by his yearly gross income of $75,000, then multiply by 100: ($24,500 / $75,000) x 100 = 32.67% Therefore, Buyer McNeil's GDS ratio is 32.67%, which is closest to option B.