For this problem, assume a maximum front-end ratio of 28% and a maximum back-end ratio of 36%. You are ready to purchase your first home. Your annual salary is $60,000. You have been able to save $17,000 for a down payment, and the only debt you currently owe are your student loan with a payment of $170 a month and your car payment of $370 a month.

a. Given your current situation, how much can you afford for a house payment (Maximum PITI)? Hint: First calculate the Maximum PITI using the front-end ratio. Then calculate the Maximum PITI + Documented monthly debts using the back-end ratio. Your answer is the lower of these two amounts. Your answer should be a whole number (no cents).

b. If you no longer have a car payment, how much can you afford for a house payment (Maximum PITI)? Hint: First calculate the Maximum PITI using the front-end ratio. Then calculate the Maximum PITI + Documented monthly debts using the back-end ratio. Your answer is the lower of these two amounts. Your answer should be a whole number (no cents).