Can I afford this home? $-$ Part $1$

Can Valerie and Shen afford this home using the monthly income loan criterion?

Next week, your friends Valerie and Shen 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 $$155,000.$ 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, Valerie and Shen also collected the following information:

Their financial records report a combined gross before$-$tax annual income of $$85,000$ and current $($premortgage$)$ installment loan,

credit card, and car loan debt of $$1,240$ per month.

Their property taxes and homeowner's insurance policy are expected to cost $$3,488$ per year.

Their best estimate of the interest rate on their mortgage is $7\mathrm{.}5\%,$ and they are interested in obtaining a $15-$year loan.

They have accumulated savings of $$38,500$ 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

$30\%.$