10% down payment $500 per month for estimated combined property taxes and insurance .5% interest rate for 30 years Refer to Exhibit 7-7 for current mortgage rates Current Financial Situation $55,200 Assets (Jamie Lee and Ross combined): Checking account Savings account Income: $4,300 Gross income (Jamie Lee) $45,000 Net income after taxes (Jamie Lee) $31,500 Emergency fund savings $19,100 Gross income (Ross) $70,000 account IRA balance Car (Jamie Lee) Car (Ross) Liabilities (Combined): Student loan balance Credit card balance Car loans Net income after taxes $24,000 $59,000 (Ross) Monthly Expenses $12,000 (Combined): $20,000 Utilities. $160 Food $325 $0 Gas/Maintenance $275 $0 Credit card payment $0 $8,000 Car loan payment Entertainment $289 $300 Step 1 Determine your monthly gross income (annual gross income / 12) Step 2 With a down payment of at least 5%, lenders use 33% of monthly gross income as a guideline for PITI (principal, interest, taxes, and insurance) and 38% of monthly gross income as a guideline for PITI plus other debt payments. Enter 33% or 38% depending upon whether other debt payments are present. Step 3 $ 9,583.33 X 38%