The annual income of a borrower is $74,000.00. What is the maximum dollar amount he can borrow to purchase a house if the bank requires that the borrower’s debt to income ratio not to exceed 36% of his gross monthly income. The borrower is making a monthly payment of $250.00 for an auto loan and the current mortgage rate is 6.97%. The borrower can afford a total of 20% for the down payment and a closing cost of $6,765.00.

The annual income of a borrower is $74,000.00. What is the maximum dollar amount he can borrow to purchase a house if the bank requires that the borrower’s debt to income ratio not to exceed 36% of his gross monthly income. The borrower is making a monthly payment of $250.00 for an auto loan and the current mortgage rate is 6.97%. The borrower can afford a total of 20% for the down payment and a closing cost of $6,765.00.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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