Answer: The borrower could afford a $600 house payment.
To find the house payment, we first need to find the monthly income of the borrower.
40000 / 12 = 3333.33
Now, we take the $3,333.33 monthly amount and multiply it by the 39% debt ratio.
3333.33 x 0.39 = 1300
So, the lender has $1,300 to spend. If we minus the $700 non-housing debt payments, he/she is left with $600 for his house payment.
