Continuing Case 24. Housing Affordability Five years have passed and Jamie Lee, 34, is considering taking the plunge-not only is she engaged to be married, but she is also deciding on whether to purchase a new home. Jamie Lee's cupcake caf is a success! It has been open for over a year now and has earned itself rave reviews in the local press and from its regular customers who just cannot get enough of her delicious varieties of cupcakes. One such customer, who stopped by on a whim in the caf's first week of business, is Ross. After a whirlwind courtship, Ross, a self-employed web designer, proposed, and Jamie Lee agreed to be his wife. The bungalow that Jamie Lee has been renting for the past five years is too small for the soon-to-be newlyweds, so Jamie Lee and Ross have purchased a brand new three-bedroom, 2 bath home in a quiet neighborhood for $273,000. Use the provided information and the table below to calculate the affordable mortgage amount that would be suggested by a lending institution based on Jamie Lee and Ross's income. You will need to make note of the purchase price (above) of their home for future questions. Use the following for Jamie Lee and Ross's calculations: 10% down payment $500 per month for estimated combined property taxes and insurance 5% interest rate for 30 years Refer to Exhibit 7-7 for current mortgage rates Current Financial Situation Assets (Jamie Lee and Income: Ross combined): Gross income (Jamie Checking account $4,300 $45,000 Lee) Savings account $55,200 Net income after taxes (Jamie Lee) $31,500 Emergency fund savings $19,100 Gross income (Ross) $70,000 account Net income after taxes IRA balance Car (Jamie Lee) Car (Ross) Liabilities (Combined): Student loan balance Credit card balance Car loans $0 Gas/Maintenanc $8,000 Car loan payment Entertainment $24,000 $59,000 (Ross) Monthly Expenses $12,000 (Combined): $20,000 Utilities $160 Food $325 $275 $0 Credit card payment $0 $289 $300