What is typically included in a GDSR assessment?

The correct answer is that a GDSR (Gross Debt Service Ratio) assessment typically includes housing costs like mortgage payments, property taxes, and other related expenses. The GDSR helps lenders gauge how much of a borrower's income is dedicated to housing costs compared to their total income. This metric is crucial because it ensures that borrowers do not take on more housing-related debt than they can comfortably manage.

By including housing costs, lenders can assess the borrower's financial stability and ability to make their monthly payments without compromising their overall financial health. This ratio is a key indicator used in evaluating mortgage applications, particularly because it reflects the direct relationship between income and housing expenses, which is essential for lending decisions.

In contrast, focusing only on the current mortgage balance wouldn't provide a complete picture of the borrower's financial situation—mortgage balance alone does not indicate monthly housing expenses or debt-to-income ratios. Evaluating the entire income from all sources would be more relevant to the TDSR (Total Debt Service Ratio) rather than specifically GDSR. Lastly, considering only past financial behavior overlooks the current financial obligations and overall housing costs, which are critical components of the GDSR assessment.