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.

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.