1. (30 points) You would like to buy a home but have really no idea what caliber (in terms of price) of home you should be looking at. One alternative is to seek out a loan officer and get pre-qualified for a loan. An alternative is to do the math yourself and shop accordingly. Knowing that the bank will finance up to 95% LTV on a home with a FRM at 3.64% for 30 years (monthly payments) and that the maximum payment-to-income ratio is 28% and total obligations-to-income is 36%, what price of home should you be looking at and how much down payment ($s) will be required? Assume that your annual salary is $45,000, that property taxes will be about $2,500/year, and hazard insurance is about $900/year, and PMI is $100/month. In addition, you have a car loan for $275/month, student loans totaling $150/month, and credit card debt (since you lived large during your UNL years thinking that graduation would never get here) is $100/month.