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Many home renters buy their first homes believing that it is cle

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Many home renters buy their first homes believing that it is cle  [#permalink]

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New post 07 Aug 2018, 00:53
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A
B
C
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E

Difficulty:

  95% (hard)

Question Stats:

41% (02:17) correct 59% (02:29) wrong based on 171 sessions

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Many home renters buy their first homes believing that it is clearly more profitable to make mortgage payments than to pay rent. Other costs, such as maintenance, property taxes, and insurance must be factored in, however. All housing expenses together total at least 40% of most homeowners' income. It is not financially reasonable to spend any more than 30% of income on housing expenses.

If the information is correct, which of the following cannot be true?


A. The combination of property taxes, insurance, and home maintenance costs is greater than mortgage payments for a minority of homeowners

B. A minority of homeowners have reasonable housing expenses

C. A majority of renters pay an unreasonable amount for housing expenses

D. A majority of homeowners have unreasonable housing expenses

E. A minority of homeowners have unreasonable housing expenses
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Re: Many home renters buy their first homes believing that it is cle  [#permalink]

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New post 13 Aug 2018, 23:35
IMO Answer is :B

A: we can't deduce this from the given information, hence out of scope

B: This is in line with the argument given, so this is true

C: Out of scope: Rente payers are not at the issue of the argument, hence we cant deduce

D: In line with the argument: " at least 40% of most homeowners' income. It is not financially reasonable to spend any more
scenario than 30% of income
"

E: This scenario cant be true from the above info, HENCE CORRECT ANSWER
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Re: Many home renters buy their first homes believing that it is cle  [#permalink]

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New post 02 Jan 2019, 14:49
AshutoshB wrote:
Many home renters buy their first homes believing that it is clearly more profitable to make mortgage payments than to pay rent. Other costs, such as maintenance, property taxes, and insurance must be factored in, however. All housing expenses together total at least 40% of most homeowners' income. It is not financially reasonable to spend any more than 30% of income on housing expenses.

If the information is correct, which of the following cannot be true?


A. The combination of property taxes, insurance, and home maintenance costs is greater than mortgage payments for a minority of homeowners

B. A minority of homeowners have reasonable housing expenses

C. A majority of renters pay an unreasonable amount for housing expenses

D. A majority of homeowners have unreasonable housing expenses

E. A minority of homeowners have unreasonable housing expenses



I have a problem with the wording of the answers:

"It is not financially reasonable to spend any more than 30%"
This sentence does not tell us whether the expenses are reasonable or not; the expenses might be reasonable; what is unreasonable is to spend more than this amount.

If I buy a house that I cannot afford, the expenses may be reasonable. I am the one who is not financially reasonable.

So, all answers are out of scope.
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Re: Many home renters buy their first homes believing that it is cle   [#permalink] 02 Jan 2019, 14:49
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