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please answer ASAP 11. Can I afford this home? - Part 1 Can Rajiv and Simone afford this home using the monthly income loan criterion?
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11. Can I afford this home? - Part 1 Can Rajiv and Simone afford this home using the monthly income loan criterion? Next week, your friends Rajiv and Simone want to apply to the Fifth State Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $155,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows: To onist in the preparation of the worksheet, Rajiv and Simone 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 $1,550 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 $38,500 that can be used to satisfy the home's down payment and closing costs The tender requires a minimum 20% down payment, and an affordability ratio that ranges from a minimum of 25% to a maximum of 30% Use either your financial calculator or the maximum affordable mortgage loan formula to complete the following home affordability worksheet (Note: When completing the form, round each dollar amount to the nearest whole dollar. Unless labeled differently, all of the following valves represent dollar amounts. Also, some values calculated or used in the upper section of the table may also be used in the lower section) Mari Melam Poem HEM Maximum Affordable Mortgage Loan = 11 where Home Affordability Worksheet Based on Monthly Income 1. Annual Income High Value Low Value Amount 30% 25% 2. Monthly income 3. Lender's monthly income affordability ratio 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. Maximum loan based on monthly income 10. Funds Available for a Down Payment and Closing Costs 11. Required (20%) Down Payment 12. Maximum Purchase Price Based on Monthly Income 7.5% 15 High Value Low Value Amount 30% 2596 Home Affordability Worksheet Based on Monthly Income 1. Annual Income 2. Monthly Income 3. Lender's monthly income affordability ratio 4. Mascimum monthly mortgage payment (PITI) S. 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. Maximum loan based on monthly Income 10. Funds Available for a Down Payment and Closing Costs 11. Required (20%) Down Payment 12. Maximum Purchase Price Based on Monthly Income 7.5% 15 Given these results, which statement regarding Raj and Simone's mortgage qualification process and the purchase of their $155,000 target home is true? Rajiv and Simone quality to purchase their $155,000 target home according to the Monthly Income Affordability Worksheet criterion. Rajiv and Simone do not quality to purchase their $155,000 target home according to the Monthly Income Affordability Worksheet criterion Step by Step Solution
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