Read CAREFULLY, then determine the correct answer. 15. Which of the following describes front-end rallo? A. Monthly gross income divided by monthly housing expenses B. Total monthly expense divided by monthly gross income C. Monthly housing expenses divided by monthly gross income D. Monthly gross income divided by total monthly expense A B C A D

## Step 1<br />Front-end ratio, also known as the housing ratio, is a measure used in the housing industry to determine the affordability of a house. It is calculated by dividing the monthly housing expenses by the monthly gross income.<br /><br />## Step 2<br />The monthly housing expenses include the mortgage payment, property taxes, and homeowner's insurance. The monthly gross income is the total income earned before any deductions.<br /><br />## Step 3<br />The front-end ratio is used to determine the percentage of income that goes towards housing expenses. A lower ratio indicates that a larger percentage of income is available for other expenses.