{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-09-13T00:06:31-04:00", "answer_date": "2024-09-13 00:06:31", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "10522633", "url": "\/study-help\/questions\/can-i-afford-this-home-part-1-can-carlos-10522633", "question_creation_date_js": "2024-09-13T00:06:31-04:00", "question_creation_date": "Sep 13, 2024 12:06 AM", "meta_title": "[Solved] Can I afford this home? - Part 1 Can Carl | SolutionInn", "meta_description": "Answer of - Can I afford this home? - Part 1 Can Carlos and Deborah afford this home using the monthly income loan criterion? Next | SolutionInn", "meta_keywords": "afford,home,-,part,1,carlos,deborah,monthly,income,loan,criterion,week", "question_title_h1": "Can I afford this home? - Part 1 Can Carlos and Deborah afford this home using the monthly income loan criterion? Next week, your friends", "question_title": "Can I afford this home? - Part 1 Can Carlos and Deborah", "question_title_for_js_snippet": "Can I afford this home Part 1 Can Carlos and Deborah afford this home using the monthly income loan criterion Next week, your friends Carlos and Deborah want to apply to the Third Universal Bank for a mortgage loan They are considering the purchase of a home that is expected to cost $ 3 7 0 , 0 0 0 Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows To assist in the preparation of the worksheet, Carlos and Deborah also collected the following information Their financial records report a combined gross before tax annual income of $ 1 8 7 , 5 0 0 and current ( premortgage ) installment loan, credit card, and car loan debt of $ 1 , 9 5 3 per month Their property taxes and homeowner's insurance policy are expected to cost $ 9 , 2 5 0 per year Their best estimate of the interest rate on their mortgage is 7 5 , and they are interested in obtaining a 1 5 year loan They have accumulated savings of $ 8 1 , 5 0 0 that can be used to satisfy the home's down payment and closing costs The lender requires a minimum 2 0 down payment, and an affordability ratio that ranges from a minimum of 2 5 to a maximum of 3 0 Use either your financial calculator or the maximum affordable mortgage loan formula to complete the following home affordability worksheet ( Note When completing the form, round each dollar amount to the nearest whole dollar Unless labeled differently, all of the following values represent dollar amounts Also, some values calculated or used inHome Affordability Worksheet Based on Monthly Income High Value Low Value Amount Annual income 1 8 7 , 5 0 0 Monthly income Lender's monthly income afforciability ratio Maximum monthly mortgage payment ( PITI ) Estimated monthly property tax and insurance payment Maximum monthly loan payment ( P and I only ) Expected interest rate Planned loan maturity ( years ) Maximum loan based on monthly income Funds Available for a Down Payment and Closing Costs Required ( 2 0 ) Down Payment Maximum Purchase Price Based on Monthly Income Given these results, which statement regarding Carlos and Deborah's mortgage qualification process and the purchase of their $ 3 7 0 , 0 0 0 target h is true Carlos and Deborah qualify to purchase their $ 3 7 0 , 0 0 0 target home according to the Monthly Income Affordability Worksheet criterion Carlos and Deborah do not qualify to purchase their $ 3 7 0 , 0 0 0 target home according to the Monthly Income Affordability Worksheet criterion", "question_description": "
Can I afford this home? <\/span>-<\/mo><\/mrow><\/math> Part <\/span>1<\/mn><\/mrow><\/math> <\/div>
Can Carlos and Deborah afford this home using the monthly income loan criterion?<\/span><\/div>
Next week, your friends Carlos and Deborah want to apply to the Third Universal Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $<\/span>3<\/mn>7<\/mn>0<\/mn>,<\/mo>0<\/mn>0<\/mn>0<\/mn>.<\/mo><\/mrow><\/math> Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows.<\/span> <\/div>
To assist in the preparation of the worksheet, Carlos and Deborah also collected the following information:<\/span><\/div>
Their financial records report a combined gross before<\/span>-<\/mo><\/mrow><\/math>tax annual income of $<\/span>1<\/mn>8<\/mn>7<\/mn>,<\/mo>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> and current <\/span>(<\/mi><\/mrow><\/math>premortgage<\/span>)<\/mi><\/mrow><\/math> installment loan, credit card, and car loan debt of $<\/span>1<\/mn>,<\/mo>9<\/mn>5<\/mn>3<\/mn><\/mrow><\/math> per month.<\/span> <\/div>
Their property taxes and homeowner's insurance policy are expected to cost $<\/span>9<\/mn>,<\/mo>2<\/mn>5<\/mn>0<\/mn><\/mrow><\/math> per year.<\/span> <\/div>
Their best estimate of the interest rate on their mortgage is <\/span>7<\/mn>.<\/mn>5<\/mn>%<\/mo>,<\/mo><\/mrow><\/math> and they are interested in obtaining a <\/span>1<\/mn>5<\/mn><\/mtext>-<\/mo><\/mrow><\/math>year loan.<\/span> <\/div>
They have accumulated savings of $<\/span>8<\/mn>1<\/mn>,<\/mo>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> that can be used to satisfy the home's down payment and closing costs.<\/span> <\/div>
The lender requires a minimum <\/span>2<\/mn>0<\/mn>%<\/mo><\/mrow><\/math> down payment, and an affordability ratio that ranges from a minimum of <\/span>2<\/mn>5<\/mn>%<\/mo><\/mrow><\/math> to a maximum of <\/span>3<\/mn>0<\/mn>%<\/mo>.<\/mo><\/mrow><\/math> <\/div>
Use either your financial calculator or the maximum affordable mortgage loan formula to complete the following home affordability worksheet. <\/span>(<\/mi><\/mrow><\/math>Note: When completing the form, round each dollar amount to the nearest whole dollar. Unless labeled differently, all of the following values represent dollar amounts. Also, some values calculated or used inHome Affordability Worksheet<\/span> <\/div>
Based on Monthly Income<\/span><\/div>
High Value<\/span><\/div>
Low Value<\/span><\/div>
Amount<\/span><\/div>
Annual income<\/span><\/div>
1<\/mn>8<\/mn>7<\/mn>,<\/mo>5<\/mn>0<\/mn>0<\/mn><\/mrow><\/math><\/div>
Monthly income<\/span><\/div>
Lender's monthly income afforciability ratio<\/span><\/div>
Maximum monthly mortgage payment <\/span>(<\/mi><\/mrow><\/math>PITI<\/span>)<\/mi><\/mrow><\/math> <\/div>
Estimated monthly property tax and insurance payment<\/span><\/div>
Maximum monthly loan payment <\/span>(<\/mi><\/mrow><\/math>P and I only<\/span>)<\/mi><\/mrow><\/math> <\/div>
Expected interest rate<\/span><\/div>
Planned loan maturity <\/span>(<\/mi><\/mrow><\/math>years<\/span>)<\/mi><\/mrow><\/math> <\/div>
Maximum loan based on monthly income<\/span><\/div>
Funds Available for a Down Payment and Closing Costs<\/span><\/div>
Required <\/span>(<\/mi>2<\/mn>0<\/mn>%<\/mo>)<\/mi><\/mrow><\/math> Down Payment<\/span> <\/div>
Maximum Purchase Price Based on Monthly Income<\/span><\/div>
Given these results, which statement regarding Carlos and Deborah's mortgage qualification process and the purchase of their $<\/span>3<\/mn>7<\/mn>0<\/mn>,<\/mo>0<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> target <\/span>h<\/mi><\/mrow><\/math> is true?<\/span> <\/div>
Carlos and Deborah qualify to purchase their $<\/span>3<\/mn>7<\/mn>0<\/mn>,<\/mo>0<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> target home according to the Monthly Income Affordability Worksheet criterion.<\/span> <\/div>
Carlos and Deborah do not qualify to purchase their $<\/span>3<\/mn>7<\/mn>0<\/mn>,<\/mo>0<\/mn>0<\/mn>0<\/mn><\/mrow><\/math> target home according to the Monthly Income Affordability Worksheet criterion<\/span> <\/div><\/span> <\/div><\/div> \"image", "transcribed_text": "", "related_book": { "title": null, "isbn": null, "edition": null, "authors": null, "cover_image": null, "uri": null, "see_more_uri": "" }, "free_related_book": { "isbn": "", "uri": "", "name": "", "edition": "" }, "question_posted": "2024-09-13 00:06:31", "see_more_questions_link": "\/study-help\/questions\/business-management-leadership-2023-June-05", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/business-communication-essentials\/refl-ect-on-the-value-of-short-and-simple-sentences-2003528", "description": "Refl ect on the value of short and simple sentences in creating a lucid style.", "stars": 0 }, { "url": "\/discuss-the-factors-that-enable-the-development-of-healthcareassociated-infections", "description": "Discuss the factors that enable the development of healthcare-associated infections. Explain which infection-control measures have been implemented successfully to decrease the spread of these...", "stars": 3 }, { "url": "\/study-help\/questions\/can-i-afford-this-home-part-1-can-carlos-10522633", "description": "Can I afford this home? - Part 1 Can Carlos and Deborah afford this home using the monthly income loan criterion? Next week, your friends Carlos and Deborah want to apply to the Third Universal Bank...", "stars": 3 }, { "url": "\/study-help\/questions\/problem-6a8-highlow-method-predicting-cost-l0610-nova-companys-total-6084261", "description": "Problem 6A-8 High-Low Method; Predicting Cost [L06-10] Nova Company's total overhead cost at various levels of activity are presented below, Total Machine- Overhead Month Hours Cost April 55,000...", "stars": 3 }, { "url": "\/study-help\/questions\/using-the-beverage-sales-dataset-define-the-name-temp-for-495142", "description": "Using the Beverage Sales dataset, define the name temp for the range of the Temperature data and the name sales for the range of the Sales data. Then, use these range names in Excel formulas to find...", "stars": 3 }, { "url": "\/study-help\/questions\/your-client-is-renovating-an-older-victorian-style-home-into-999708", "description": "Your client is renovating an older Victorian style home into a 2-family dwelling with one unit on the ground floor and another on the 2nd floor. There are no windows on either side of the building as...", "stars": 3 }, { "url": "\/study-help\/questions\/the-following-three-lines-do-not-have-a-common-intersection-1005015", "description": "The following three lines do not have a common intersection: x+y=4, x-y=4 and x + 2y = 2. However, we can find an \"approximate solution\" to this system of equations by finding a point (x, y) that is...", "stars": 3 }, { "url": "\/study-help\/questions\/prepare-the-journal-entry-to-record-zende-companys-issuance-of-985070", "description": "Prepare the journal entry to record Zende Company's issuance of 75,000 shares of $5 par value common stock assuming the shares sell for: a. $5 cash per share. b. $6 cash per share. es View...", "stars": 3 }, { "url": "\/study-help\/questions\/hashing-is-a-oneway-function-that-maps-a-message-to-999642", "description": "Hashing is a one-way function that maps a message to a fixed-size sequence of bits (hashed value) with the assumption it is extremely difficult to reverse the process. Given the hashed-value, it is...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/lincoln-brothers-company-makes-jobs-to-customer-order-during-the-10522632", "next": "\/study-help\/questions\/refer-to-the-image-below-to-answer-the-following-questions-10522634" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Finance", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-finance" }, { "name": "Can I afford this home? - Part 1 Can Carlos and Deborah", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/can-i-afford-this-home-part-1-can-carlos-10522633" } ], "skill_details": { "skill_id": "13", "skill_name": "Finance", "parent_id": "1" } } } }