Frances and Francis, a young married couple with no children, currently rent a house for dollar 3000 per month. They want to buy a house this fall and are trying to figure out how much they can afford to spend. They have dollar 40,000 in a bank account which is earning 1%. Their combined gross income is dollar 150,000 including interest income from their bank account. As renters, they use the standard deduction. As home owners, they will be able to itemize their deductions including real estate taxes and mortgage interest. Analyze this situation and explain the price range of houses Fran and Fran should consider buying. Assume the real estate taxes on the house they buy will be dollar 12,000 per year. Use 2015 income tax rates in your analysis. Assume the interest rate on their mortgage will be 3% and that they will pay interest only on the mortgage. Alternatively, they can pay only 23/4 % on their mortgage if they pay 2 points when they start the mortgage. Assume their itemized deductions, other than real estate taxes and mortgage interest, will be dollar I0,000. Show your computations and make notes as you work on the problem. Feel free to discuss any non-tax items Fran and Fran should consider. Frances and Francis, a young married couple with no children, currently rent a house for dollar 3000 per month. They want to buy a house this fall and are trying to figure out how much they can afford to spend. They have dollar 40,000 in a bank account which is earning 1%. Their combined gross income is dollar 150,000 including interest income from their bank account. As renters, they use the standard deduction. As home owners, they will be able to itemize their deductions including real estate taxes and mortgage interest. Analyze this situation and explain the price range of houses Fran and Fran should consider buying. Assume the real estate taxes on the house they buy will be dollar 12,000 per year. Use 2015 income tax rates in your analysis. Assume the interest rate on their mortgage will be 3% and that they will pay interest only on the mortgage. Alternatively, they can pay only 23/4 % on their mortgage if they pay 2 points when they start the mortgage. Assume their itemized deductions, other than real estate taxes and mortgage interest, will be dollar I0,000. Show your computations and make notes as you work on the problem. Feel free to discuss any non-tax items Fran and Fran should consider