The Schusters have saved $65,000 for the down payment on a home. Their gross monthly income is $6300. They want to know the maximum conventional mortgage loan for which they can qualify in order to determine the highest price they can pay for a home. They have 18 payments of $600 per month remaining on their car loan. Their bank has upper limits of 32% for the GDS ratio and 40% for the TDS ratio. a. Allowing for property taxes of $300 per month and heating costs of $225 per month, what, maximum monthly mortgage payment do the GDS and TDS ratios permit? b. What is the maximum mortgage loan for which the Schusters can qualify? (Use a 25-year amortization and an interest rate of 5.14% compounded semiannually for a five-year term. Round the answer to the nearest $100.) c. Based on a $65,000 down payment and the maximum loan from part (b), what is the highest price they can pay for a home? Round the answer to the nearest $100.

The Schusters have saved $65,000 for the down payment on a home. Their gross monthly income is $6300. They want to know the maximum conventional mortgage loan for which they can qualify in order to determine the highest price they can pay for a home. They have 18 payments of $600 per month remaining on their car loan. Their bank has upper limits of 32% for the GDS ratio and 40% for the TDS ratio. a. Allowing for property taxes of $300 per month and heating costs of $225 per month, what, maximum monthly mortgage payment do the GDS and TDS ratios permit? b. What is the maximum mortgage loan for which the Schusters can qualify? (Use a 25-year amortization and an interest rate of 5.14% compounded semiannually for a five-year term. Round the answer to the nearest $100.) c. Based on a $65,000 down payment and the maximum loan from part (b), what is the highest price they can pay for a home? Round the answer to the nearest $100.

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter9: Obtaining Affordable Housing

Section: Chapter Questions

Problem 1DTM

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