Suppose a single person earns $50,700 per year and also has other monthly installment obligations of $550. The purchase of a home requires a 5% down payment and an escrow of 3.2% per year to cover property taxes and hazard insurance. Private mortgage insurance (PMI) of .78% of the loan value per year is also required. The loan underwriter will apply a DTI (debt-to-income) or back ratio of 43%. The 30-year monthly loan payment factor is .004774 for a loan at 4% interest per year. This person can afford a home priced at:

$521,669

$260,834

$169,500

$162,000