Question
After careful analysis, you determine that you can afford the monthly payments on a home you like in Laguna Beach with a purchase price of
After careful analysis, you determine that you can afford the monthly payments on a home you like in Laguna Beach with a purchase price of $4.5 million. You plan to take out out a fixed 30-year mortgage with a rate of 2.67%. The entire $4.5 million purchase price is borrowed. You decide to wait a year, and the 30-year fixed mortgage rate increases to 4.67%. What is the maximum price you can now pay for the home, assuming the same monthly payment as before, assuming again that the entire purchase price is borrowed? Please round your numerical answer to the nearest integer number of dollars.
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