Bob earns$48,000per year and his wife Susan earns$50,000per year gross.They have debt as follows:a car loan with$450per month payment,a visa which requires a minimum monthly payment of$100,and combined student loan payments totaling350per month.The bank allows a32%GDSand40%TDS.Thehouse they wish to purchase has been appraisedat$210,000,howeverthe purchase price is$215,000because it is a seller's market.Monthly property taxes and heating costs are$400per month total.They areapplying for aconventionalmortgage(using80%maximumas the bank's rule)and their selected term is at3%interest lender posted rate and the amortizationis25years.Currently,considerthe Bank of Canada benchmark rate to be4.95%for stress test purposes on conventional mortgages.

1) Which of the following is closest tothe maximum amount of a mortgage loan that Bob and Susan qualify for, based on the Gross Debt Service (GDS)?

a) 428,200

b) 380,500

c) 408,500

d) 398,300

2) The maximum conventional mortgage loan that Susan and Bob qualify for on this house purchase is:

a) 398,600

b) 160,300

c) 380,500

d) 168,000

3) Which of thefollowingis closest tothe maximum amount of a mortgage loan that Bob and Susan qualify for, based on the Total Debt Service(TDS)?

a) 310,300

b) 428,100

c) 338,200

d) 322,500