Can Aiden and Jesse Afford This Home Using the Monthly Income Loan Criterion? Next week, your friends Aiden and Jesse want to apply to the Tenth National Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $245,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows. (Note: When completing the form, round each dollar amount to the nearest whole dollar.) To assist in the preparation of the worksheet, Aiden and Jesse also collected the following information: Their financial records report a combined gross before-tax annual income of $125,000 and current (premortgage) installment loan, credit card, and car loan debt of $1,823 per month. Their property taxes and homeowner's insurance policy are expected to cost $5,513 per year. Their best estimate of the interest rate on their mortgage is 7.5%, and they are interested in obtaining a 15-year loan. They have accumulated savings of $56,500 that can be used to satisfy the home's down payment and closing costs. The lender requires a minimum 20% down payment, and an affordability ratio that ranges from a minimum of 25% to a maximum of 30%. A table of monthly payments (necessary to repay a $10,000 loan) follows: Loan Maturity Interest Rate (%) 10 Years 15 Years 20 Years 25 Years 30 Years 5.0 106.0655 79.0794 65.9956 58.4590 53.6822 5.5 108.5263 81.7083 68.7887 61.4087 56.7789 6.0 111.0205 84.3857 71.6431 64.4301 59.9551 6.5 113.5480 87.1107 74.5573 67.5207 63.2068 7.0 116.1085 89.8828 77.5299 70.6779 66.5302 7.5 118.7018 92.7012 80.5593 73.8991 69.9215 8.0 121.3276 95.5652 83.6440 77.1816 73.3765 8.5 123.9857 98.4740 86.7823 80.5227 76.8913 9.0 126.6758 101.4267 89.9726 83.9196 80.4623 9.5 129.3976 104.4225 93.2131 87.3697 84.0854 10.0 132.1507 107.4605 96.5022 90.8701 87.7572