Toad, 30, works for a private equity firm. She just got a raise and would like to buy a home. She has come to you for guidance.

Toad's salary is $101,000 a year, but she is unsure how much she should spend on housing. She currently pays $1,750 for rent and pays a tenant insurance policy of $325 per year. She would like to make semi-monthly mortgage payment. She currently pays $575 a month for her car lease and has a student loan payment of $325.

Toad has done some research and has found that home insurance premiums and property taxes for an average home in the area she would like to live are about $460 and $2,300 respectively. She estimates that heating costs and maintenance will cost about $1,275 and $1,025 respectively. If she chooses a condo she expects the associated condo fees to be $450/month.

Property values in her ideal area have been increasing around 5 percent per year over the past six years. Closing costs would be about $5,500 and she would be making a 20% down payment.

Toad's bank will use a maximum TDS ratio of 42 percent to qualify him for a mortgage. In addition, the posted five-year mortgage rate is 4.75%, compounded twice a month.

1. What is the maximum mortgage payment that Toad would qualify for? What would be the semi-monthly payment on his mortgage?
2. What is the maximum mortgage amount that Brinda would qualify for? The mortgage will be amortized over 20 years.
3. What is the maximum value of a home that Brinda would qualify for if she made a 20 percent down payment?