You are now ready to participate in the American Dream, and contemplate buying a house. Current 30 year mortgage rates are at a low annual rate of 3.125%. Your monthly mortgage payment cannot be more than 32 % of your gross monthly income. Furthermore, a 15% down payment is required on any house that you buy. You want to buy the 365,000 house on Elm Street. The mortgage company has approved your loan. (rent was not given by the professor)

Answer the following questions :

a) How much do you need for the down payment?

b) What would be the required mortgage payments for the house_ ?

c) How much must your Gross Monthly Income (GMI) be to qualify for the Loan ?

d ) How much must your annual income have been in order for you to have qualified for the mortgage ?