John comes to you, a loan officer at a local bank, asking for a mortgage. You collect the following information from him. He would like a mortgage term = 30 years. His salary is $72K per year. He's currently paying $450 per month in student loans, and $300 per month in car loans. The estimate for property taxes for the homes he's interested in is $4, 200 per years, and the homeowner's insurance will cost $1, 500 per year. John has saved up $30,000 for a down payment. Assume that the bank has the following rules: The total monthly debt payments can't be more than 1/3 of the borrower's gross salary Costs associated with this home can't he more than 1/4 of the borrower's gross income The borrower must have 20% of the value of the house for a down payment to avoid PMI. Otherwise, the borrower must pay an additional 0.3% in interest rates. Today's rates for a 30 year term for someone with John's good credit score = 6% if PMI is not required. a. What is the most you'd be willing to lend to John today? What's the maximum value of the house that John can afford