You and your marital partner are planning to buy a new house. You have a combined annual family income of $420,000. Your mortgage lender (with whom you have a long-term borrowing relationship) is quoting you the following terms: * the down payment on the purchase has to be 20%, * the monthly loan payment cannot exceed 30% of your monthly salary, * closing costs are 2.5% of the loan amount, * the interest rate on the loan is 3% APR with monthly compounding, * for a loan that is to be repaid in equal monthly payments over 30 years with the first payment due one month from today. Assume that you and your partner have enough cash to pay the closing costs and make the down payment and that you will the buy the highest value home that is possible under the terms quoted above. Given this information, answer the following two questions:

A. What is the maximum loan amount your mortgage lender is willing to lend to you? Show your work below.

B. Complete the following additional aspects of the transaction.

B1. What is the dollar amount of closing costs you have to pay?

B2. What is the dollar amount of the down payment you will make?

B3. What is the dollar value of the home that you will buy?