a wants to buy a home and is applying for a conventional mortgage loan. Her gross monthly income is $6,200. She has 32 payments of $525 per month remaining on her car loan, and 19 payments of $215 per month remaining on her student loan. Her bank has upper limits of 36% for GDS and 43% for TDS. Allowing for property taxes of $400 per month and heating costs of $300 per month, what maximum monthly mortgage payment do the GDS and TDS limits permit?

a wants to buy a home and is applying for a conventional mortgage loan. Her gross monthly income is $6,200. She has 32 payments of $525 per month remaining on her car loan, and 19 payments of $215 per month remaining on her student loan. Her bank has upper limits of 36% for GDS and 43% for TDS. Allowing for property taxes of $400 per month and heating costs of $300 per month, what maximum monthly mortgage payment do the GDS and TDS limits permit?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter8: Taxation Of Individuals

Section: Chapter Questions

Problem 64IIP

See similar textbooks

Similar questions

Michiko and Saul are planning to attend the same university next year. The university estimates tuition, books, fees, and living costs to be 12,000 per year. Michikos father has agreed to give her the 12,000 she needs to attend the university. Saul has obtained a job at the university that will pay him 14,000 per year. After discussing their respective arrangements, Michiko figures that Saul will be better off than she will. What, if anything, is wrong with Michikos thinking?
Carlos opens a dry cleaning store during the year. He invests 30,000 of his own money and borrows 60,000 from a local bank. He uses 40,000 of the loan to buy a building and the remaining 20,000 for equipment. During the first year, the store has a loss of 24,000. How much of the loss can Carlos deduct if the loan from the bank is nonrecourse? How much does Carlos have at risk at the end of the first year?
Amy earns $5,891 per month. She pays a monthly mortgage of $1,230, a monthly car payment of $195, and a student loan payment of $210 per month. She would like to apply for a credit card but needs to keep her back- end DTI at 40% maximum. What would her maximum monthly credit payment need to be?
Rachel and Alexander Harrison need to calculate the amount they can afford to spend on their first home. They have a combined annual income of $67,500 and have $37,000 available for a down payment and closing costs. The Harrisons estimate that homeowner's insurance and property taxes will be $150 per month. They expect the mortgage lender to use a 28 percent (of monthly gross income) mortgage payment affordability ratio, to lend at an interest rate of 6 percent on a 30-year mortgage, and to require a 10 percent down payment. Based on this information, use the home affordability analysis form in Worksheet 5.3 to determine the highest-priced home the Harrisons can afford. Assume that closing costs are one-half of the down payment. Round the answer to the nearest dollar. $
Kim is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living at home and works in a shoe store, earning a gross income of $970 per month. Her employer deducts $221 for taxes from her monthly pay. Kim also pays $98 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $109 per month. Help Kim make her decision by calculating her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Enter your answers as a percent rounded to 2 decimal places.) Debt Payments-to-Income Ratio Ratio with college loan Ratio without college loan
Madeline Rollins is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Madeline is living at home and works in a shoe store, earning a gross income of $1,140 per month. Her employer deducts a total of $260 for taxes from her monthly pay. Madeline also pays $160 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $260 per month. Calculate her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Enter your answers as a percent rounded to 2 decimal places.) Debt Payments-to-Income Ratio With college loan % Without college loan %. Pls show steps complete.
Felice bought a duplex apartment at a cost of $205,000. Her mortgage payments on the property are $1,340 per month, $666 of which can be deducted from her income taxes. Her real estate taxes total $1,860 per year, and insurance costs $1,476 per year. She estimates that she will spend $1,074 each year per apartment for maintenance, replacing appliances, and other costs. The tenants will pay for all utilities. What monthly rent must she charge for each apartment to break even?
Cathy borrowed $24,000 to buy a new car and expects to pay $400 per month for the next 3 years to pay off the loan. What is the loan's annual rate of interest?