Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation. (Refer to Exhibit 9-8 and Exhibit 9-9) (Round time value factor to 2 decimal places, intermediate and final answers to the nearest whole number.) Mortgage Costs $ 1,950 15 $ 125 $ 160 6.5 Monthly gross income Down payment to be made (percent of purchase price) Other debt (monthly payment) Monthly estimate for property taxes and insurance 30-year loan Percent Percent Affordable Amount Affordable monthly mortgage payment Affordable mortgage amount Affordable home purchase price x 33 Exhibit 9-8 Housing affordability and mortgage qualification amounts Example A Example B Step 1: Determine your monthly $48,000 = 12 $48,000 = 12 gross income (annual income divided by 12). Step 2: With a down payment of at $4,000 $4,000 least 5 percent, lenders use x 38 33 percent of monthly gross $1,520 $1,320 income as a guideline for PITI (principal, interest, taxes, and insurance) and 38 percent of monthly gross income as a guideline for PITI plus other debt payments. Step 3: Subtract other debt -380 payments (e.g., payments on -300 -300 an auto loan) and an estimate of the monthly costs of property taxes and homeowner's insurance (c) Affordable monthly mortgage $ 840 $1,020 payment Step 4: Divide this amount by the =$7.34 =$7.34 monthly mortgage payment * $1,000 * $1,000 per $1,000 based on current mortgage rates-an 8 percent, 30-year loan, for example (see Exhibit 9-9) -and multiply by $1,000 (6) Affordoble mortgage amount $114,441 $138,965 Step 5: Divide your affordable mortgage amount by 1 minus the fractional portion of your down payment (e.g., 1-1 with a 10 percent down payment) (c) Affordable home purchase price $127,157 $154,405 3.9 Torm Rato 30 Yoars 25 Yoars 20 Yoars 15 Yours 3.09 $4.22 $4.74 $5.55 $6.91 3.5 4.49 5.01 5.80 7.15 4.0 4.77 5.28 6.06 7.40 4.5 5.07 5.56 6.33 7.65 5.0 5.37 5.85 6.60 7.91 5.5 5.68 6.14 6.88 8.17 6.0 6.00 6.44 7.16 8.43 6.5 6.32 6.67 7.45 8.71 7.0 6.65 7.06 7.75 8.98 7.5 6.99 7.39 8.06 9.27 8.0 7.34 7.72 8.36 9.56 8.5 7.69 8.05 8.68 9.85