John & Julie Smith

$100,000 sales price

$88,000 loan amount

4.50% mortgage interest rate

Amortization = 30 years

Primary borrower annual salary = $51,240

Secondary borrower annual salary = $23,280

Checking acct = $4,000

Savings acct = $18,000

Real estate taxes = $2,400/year

Insurance = $972/year

2002 Honda Civic; $6,500 value, $2,798 loan balance; pmts = $146/month

2007 Nissan Maxima; $11,000 value, $6,988 loan balance; pmts = $248/month

Personal property = $4,200 value

Rent = $650/month

Credit card #1 = $1,978

Credit card #2 = $748

Credit card #3 = 1,400

Credit card pmts = 2% of balance

Student loans = $18,000

Student loan pmt = 4% of balance

Utility bill average = $275/m

Car insurance = $845 every 6 months

Child care = $800/month

Credit score = 650; average

* please note that not all expenses listed are included in the calculation of debt to income.

* you should use all expenses when calculating your own personal budget, but some of the expenses are not used in calculating debt to income.

1. Calculate housing debt to income
2. Calculate total debt to income
3. Loan to value