Low Value Amount 25% Home Affordability Worksheet Based on Monthly Income High Value 1. Annual income 2. Monthly income 3. Lender's monthly income affordability ratio 30% 4. Maximum monthly mortgage payment (PITI) 5. Estimated monthly property tax and insurance payment 6. Maximum monthly loan payment (P and I only) 7. Expected interest rate 8. Planned loan maturity (years) 9. Mortgage payment factor per $10,000 (from the Loan Maturity table) 10. Maximum loan based on monthly income 11. Funds Available for a Down Payment and Closing Costs 12. Required (20%) Down Payment 13. Maximum Purchase Price Based on Monthly Income 7.5% 15 Given these results, which statement regarding Jacob and Madison's mortgage qualification process and their purchase of their $245,000 target home is true? Jacob and Madison do not qualify to purchase their $245,000 target home according to the Monthly Income Affordability Worksheet criterion. O Jacob and Madison qualify to purchase their $245,000 target home according to the Monthly Income Affordability Worksheet criterion. 11. Can I afford this home? - Part 1 Aa Aa E Can Jacob and Madison Afford This Home Using the Monthly Income Loan Criterion? Next week, your friends Jacob and Madison want to apply to the Third Universal Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $245,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows. (Note: When completing the form, round each dollar amount to the nearest whole dollar.) To assist in the preparation of the worksheet, Jacob and Madison also collected the following information: Their financial records report a combined gross before-tax annual income of $85,000 and current (premortgage) installment loan, credit card, and car loan debt of $1,240 per month. Their property taxes and homeowner's insurance policy are expected to cost $6,125 per year. Their best estimate of the interest rate on their mortgage is 7.5%, and they are interested in obtaining a 15-year loan. They have accumulated savings of $56,500 that can be used to satisfy the home's down payment and closing costs. The lender requires a minimum 20% down payment, and an affordability ratio that ranges from a minimum of 25% to a maximum of 30%