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A client has come to you for advice on, given a specific set of circumstances whether a specific purchase works (financially) for them. Following is the information they provide to you Married couple, late 20's, 2 preschool children. Gross annual salary of $62,000 Currently renting but have found a new condominium development where they can purchase a unit for $215,000.00 The yearly insurance would be $800.00, yearly taxes would be $2,500.00 and utilities are estimated at $1440.00 for a year (about $500.00 higher than in the rental). Because of their short credit history and only average credit score they have been pre-qualified for a fixed rate. 30 year loan @ 6%. The lender charges 2 points on mortgages where at least 20% down payment is made but 3 points if less than 20%. No loan is offered if less than 10% down payment is made. Closing costs are estimated at 5% of the homes purchase price The bank is willing to lend if the monthly principal+interest payments are less than or equal to 28% of the monthly gross income OR if the monthly PITI to monthly gross income is less than or equal to 35%. They have $44,000.00 in CD's that have been saved specifically for buying a home. They also have $20,000 in their emergency fund. What are three advantages and three disadvantages you would discuss with the couple about buying a condominium compared to continued renting of a similar size apartment? If the lender decided that they put down 20% could the couple afford to buy? Support your answer with numbers! 11- Ill If they want to only put $25,000.00 down calculate their closing costs. Determine, using a mortgage calculator, their monthly principal+inter payments. Would they qualify for the loan based on one or both ratios? Support your answer with numbers!!! IV- What recommendations would you make regarding lowering their monthly payments? If they asked about an adjustable mortgage with a first year rate of 5% that could go up a maximum of 2% a year with a c of 12% what would you tell them? What other (financial) information would you like to know about this family that would help you in answering the questions raised