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Assume you are interested in purchasing a $350,000 house with the following characteristics: 80% Loan to Value Loan @ 4% interest (30yr, fully amortized) Property

Assume you are interested in purchasing a $350,000 house with the following characteristics:

  • 80% Loan to Value Loan @ 4% interest (30yr, fully amortized)
  • Property taxes = 1.2% of purchase price per year
  • Homeowners Insurance = $1,000/yr
  • Homeowners Association Dues = $200/mo
  • Payment-to-Income Ratio = 28%
  • Total Obligations-to-Income Ratio = 35%
  1. How much do you have to earn to afford this house (assuming zero consumer debt)
  2. Will you still be able to afford the house if you have $300/mo in student debt payments and a $200/mo car payment?

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