Terrance currently earns $3,500 per month and is looking to buy a house. Terrance has the following monthly debt payment expenses: $75 for credit cards, $125 for student loans, and a $235 car payment. The monthly mortgage, including principal, insurance, and taxes, is $900. Does Terrance meet the FHA housing payments-to-income ratio guideline?

• A :

  Yes, because the ratio is less than 31%.

• B :

  No, because the ratio is greater than 43%.

• C :

  Yes, because the ratio is less than 43%.

• D :

  No, because the ratio is greater than 31%.