Buying a Vacation Home

Barrie and Inga Adlington, of Birmingham, England, have just finished putting their three daughters through college. As empty$-$nesters, they are

considering purchasing a vacation home in the United States on a lake because prices have dropped in recent years. The house might also serve as a

retirement home once they retire in $6$ years. The Adlingtons' net worth is $$385,000$ including their home worth about $$267,000$ on which they currently

owe $$42,000$ for their first mortgage, with a $$791$ per month payment. Their outstanding debts in addition to their mortgage include $$12,100$ on one

car loan $($ $$265$ monthly payment$),$ $$13,600$ on a second car loan $($ $$291$ monthly payment$),$ and a $$25,400$ second mortgage on their home taken out to

help pay for their daughters' college expenses $($ $$180$ monthly payment$).$ Their income is $$100,000.$

a$.$ Calculate the Adlingtons' debt$-$to$-$income ratio. Round your answer to two decimal places.

$\%$

b$.$ Advise them as to the wisdom of borrowing to buy a vacation home at this time.

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