An applicant is requesting a 10 years housing loan of $100,000, current mortgage rate is 5%. The principal and interest payments are due from year one. The applicant lists the following information on the loan application:

Score Max. Score

1. Annual income: $50,000 40%
2. Relations with banks: none 10%
3. Major credit cards: none 5%
4. Age: 35 5%
5. Annual debt service 0% 20%

Ratio before the loan

6. Deposit Accounts held: Demand deposit 10%
7. Occupation: Professional 10%

100%

Use your judgement to plug in your own assessment of the appropriate scores assigned to the various factors in the loan application, relative to the maximum score given in the table. You need to find the debt service ratio after taking the loan (debt service defined as: annual interest + principal repayment as a % of annual income), which together with the other scores would help you make a decision whether to accept or decline the housing loan application. Accept if the total score of the applicant is above 50%, reject otherwise