The amount of income left over after debt is subtracted is called:

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Prepare for the Utah Mortgage PLM Exam. Study with flashcards and multiple choice questions, with each question providing hints and explanations. Gear up for test day!

Multiple Choice

The amount of income left over after debt is subtracted is called:

Explanation:
The term describes the money you have left after settling debt obligations from your income. In underwriting, you subtract monthly debt payments from gross income to see what remains to cover living expenses and other essentials. That remaining amount is residual income. This differs from net income (income after taxes and withholdings), disposable income (money you have after taxes to spend), and gross income (income before any deductions). For example, if gross monthly income is $5,500 and monthly debt payments total $1,700, the residual income is $3,800.

The term describes the money you have left after settling debt obligations from your income. In underwriting, you subtract monthly debt payments from gross income to see what remains to cover living expenses and other essentials. That remaining amount is residual income.

This differs from net income (income after taxes and withholdings), disposable income (money you have after taxes to spend), and gross income (income before any deductions). For example, if gross monthly income is $5,500 and monthly debt payments total $1,700, the residual income is $3,800.

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