GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 23 May 2019, 23:02

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

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

Author Message
TAGS:

### Hide Tags

Senior Manager
Joined: 07 Dec 2017
Posts: 317
Many home renters buy their first homes believing that it is cle  [#permalink]

### Show Tags

07 Aug 2018, 00:53
6
00:00

Difficulty:

95% (hard)

Question Stats:

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

### HideShow timer Statistics

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
Senior Manager
Joined: 07 Dec 2017
Posts: 317
Re: Many home renters buy their first homes believing that it is cle  [#permalink]

### Show Tags

13 Aug 2018, 23:35

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
Manager
Status: GMAT Coach
Joined: 05 Nov 2012
Posts: 141
Location: Peru
GPA: 3.98
Re: Many home renters buy their first homes believing that it is cle  [#permalink]

### Show Tags

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.
_________________
Clipper Ledgard
GMAT Coach
Re: Many home renters buy their first homes believing that it is cle   [#permalink] 02 Jan 2019, 14:49
Display posts from previous: Sort by