12. Can I afford this home? - Part 2 Can Alden and Jesse Afford This Home Using the Installment Debt Loan Criterion? Next week. your friends Alden and Jesse want to apply to the Fourth Global Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost 5155,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows. (Note: When completing the form, round each dollar amount to the nearest whole dollar) To assist in the preparation of the worksheet, Alden and Jesse also collected the following information: Their financial records report a combined gross before-tax annual income of $145,000 and current (pre-mortgage) installment loan, credit card, and car loan debt of 12,115 per month. Their property taxes and homeowner's Insurance policy are expected to cost $1,550 per year. . Their best estimate of the interest rate on their mortgages 7.54. and they are interested in obtaining a 15-year loan. They have accumulated savings of $38.500 that can be used to satisfy the home's down payment and closing costs. The lender recuires a minimum 20% down payment, and installment loan affordability ratios that range from a minimum of 33% to a maximum of 304 A table of monthly payments necessary to repay a $10,000 loan follow Interest Rate (9) 50 60 6.5 Loan Maturity 10 Year 15 Year 105.0655 79,0794 1005363 81.7053 111.0205 543857 113.540 671107 116.1055 09.30 118.7018 92 7032 95.5652 18.4740 116.6756 1014267 104 4225 132.1507 107.4505 20 Year 65.9956 65.700 71.5431 24.5573 77.5299 00.5503 6440 7.0 25 Year 30 Year 58.4590 55.6022 61.4067 36.779 04.4301 59.9351 67.5207 62065 70.6779 06.5202 73.6991 60.9215 77.1510 73.3765 10.5227 76.0913 I 30.4632 40854 W.TO 873572 3.0 . 100 96.5032 05: Assignment - Making Automobile and Housing Decisions Note: Unless labeled differently, all of the following values represent dollar amounts. Also, some values calculated or used in the upper section of the table may also be used in the lower section, Remember to round each dollar amount to the nearest whole dollar. High Value Low Value Amount 389 334 Home Affordability Worksheet Based on Installment Payments and Monthly Income 1. Annual Income 2. Monthly Income 3. Edsting monthly installment payments 4. Existing monthly installment payments as percentage of monthly income (9) 5. Lender's monthly installment loan affordability ratio 6. Maximum amount of total affordable installment debt 7. Madmum monthly mortgage payment (PETT) affordable based on installment loan radio 8. Estimated monthly property tax and insurance payment 9. Madmum monthly loan payment and I only) 10. Eccted Interest rate 11. Planned loan maturity (years) 12. Mortgage payment factor per $10,000 (from the loan Maturity table) 13. Maximum loan based on mortgage payment factor from the Loan Maturity table) 14. Ried 2015) down payment 15. Mamun home price based on installment loan radio WI 7.5% 15 Given these results, which statement regarding Alden and Sess's mortgage qualification process and their purchase of their 5155.000 tarpet home is den anden uit de purchase their $155.000 tapet home according to the installment Debe Affordability Worksheet criterion. site and se do not quality to purchase their $155.000 target home according to the installment Debt Affordabuty Worksheet Grade Now Save & Contine Connue without saving O IT
