Use a fictitious buyer, Mr and Mrs Smith who make a combined salary of $120,000 per year. They have 1 car payment of $400 per month and a credit card of $150 per month. They have $40,000 in their savings account. They want to buy a home: How much of a purchase price can they qualify for? What kind of loan is best for them? FHA, Conventional, VA, Adjustable?? Use the ratios for the front and back end to qualify them for a loan. Check BankRate.com for current interest rates. Show your work on how you arrived at this qualification. What will their monthly PITI payments be. What will their closing costs and down payment be. I want to see a trail of action that you take to figure out how this couple can afford to buy a home and how they are going to pay for it.