Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation. Use Exhibit 7-6. Exhibit ZZ (Round your intermediate and final answers to the nearest whole dollar) Monthly gross income $ 3,475 Other debt (monthly payment) $ 235 30-year loan at 6 percent Down payment to be made (percent of purchase price) 15 percent Monthly estimate for property taxes and insurance $ 210 nts Answer is complete but not entirely correct. Amordable monthly mortgage payment 876 Affordable mortgage amount $ 103,7323 Affordable home purchase 5 1.222.038 Exhibit 7-6 Housing Affordability and Mortgage Qualification Amount Example A Examples $48,000 12 $48.000 - 12 $ 4,000 x0.38 $ 1,520 54.000 x033 51,320 -380 -300 300 $ 840 Step 1: Determine your monthly gross income (annual income divided by 12). Step 2 With a down payment of at least 5 percent, lenders use 33 percent of monthly gross 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 payments (0.9. payments on an auto loan) and an estimate of the monthly costs of property taxes and homeowner's insurance. (0) Affordoble monthly mortgage payment....... Step 4: Divide this amount by the monthly mortgage payment per $1,000 based on current mortgage rates-an 5 percent, 30-year loan, for example (soe Exhibit 7-7) - and multiply by $1,000 (b) Affordable mortgage amount Step 5: Divide your affordable Mortgage amount by 1 minus the tractional portion of your down payment (0.9.1 -0.1 with a 10 percent down payment). te) Affordabio home purchase price $1,020 +$5.37 x $ 1,000 $ 5.37 X $1,000 $156,425 $189.944 -0.9 -0.9 5173.805 $211,049 NOTE The two bos bending instutions use and other loan requirements may vary based on a variety of factors, including the type of mortgage the amount of the down payment your income level credit score and current interest rates. For example, with a down payment of 10 percent or more and a credit score exceeding 720, the ratios might increase to 40/45 percent in this exhibit Term Rate 30 Years 25 Years 20 Years 15 Years 3.05 5422 $4.74 Exhibit7-7 Mortgage Payment Factors (principal and interest factors per $1,000 of loan amount) 3.5 $5.55 580 4:49 $6.91 7.15 4,0 5.01 5.28 4.77 606 7.40 4.5 5.07 5.56 6.33 50 5:37 7.65 7.91 5.85 6.60 5.5 5.68 6.14 6.88 8.17 6.0 6.00 6.44 7.16 8.44 6.5 6.32 6.25 7.46 8.71 7.0 6.65 707 7.75 8.99 6.99 7.5 80 8.06 7.39 7.72 7.34 9.27 9.56 8.36
