Scenario: Margo, age $59,$ wants to get a mortgage loan from the bank to purchase a new home in St$.$ Augustine, Florida. She has a very successful business that she manages online from home and currently lives in a condo in Scottsdale, Arizona. Her income is currently $$130,000$ dollars a year. Since she needs to help her mother, who currently rents a home in St$.$ Augustine, Florida, she is planning a move there in the next $2$ months.

She has lived in her condominium for $10$ years and has a remaining mortgage balance of $$150,000.$ Over the last $3$ years, she has seen the value of her condominium go from her purchase price of $$300,000$ to be worth $$360,000$ today. The equity in her current home minus closing costs $($estimated to be around $$27,000)$ and moving expenses $($estimated to be around $$5,000)$ represent the down payment for her new home in Florida. Since she wants to also move her mother into the prospective home in St$.$ Augustine, she is looking for at least $1,700$ square feet of space and at least $34$ bedrooms and $2\mathrm{.}5$ baths. In about $5$ years, she plans to semi$-$retire since her savings and investments only total about $$300,000.$ She has a car that she has paid off in the last $5$ years, and her FICO score is $700.$

Determine what property she should purchase if she wants to be fairly near shopping and amenities in St$.$ Augustine, and have enough space while respecting her need to semi$-$retire in the coming years. You can use a common real estate website to explore options.

Describe the property you recommend to the client based on their needs.

Explain the type$($s$)$ of mortgage$($s$)$ the client would qualify for.

Then recommend which mortgage type the client should apply for based on your calculations of the housing$-$to$-$expense ratio and the debt$-$to$-$income ratio.

Show your calculations for the housing$-$to$-$expense ratio.

Show your calculations for the debt$-$to$-$income ratio.