Bryan and his wife, Jane, both work and have a combined gross income of $165,000 per year. They estimate the property taxes on their condo will be $2,100 and insurance would be about $1,500 per year. Jane has a car payment of $200 per month and they are both still paying off student loans for a combined total of $600 per month.

Find out how much of a monthly mortgage Bryan and Jane can afford. See your notes for the total expense ratio calculation.

Suppose the couple can get a 30-year loan with a rate of 3.5%, how much house could they afford based on the payment you found in part a?