You are planning to buy a house. Assume that you have the cash to pay 20% down payment on any home that your $2,400/month maximum payment can afford including taxes and insurance (no PMI required). A lender offers you a 30 year fixed mortgage for the remaining 80% with 4.5% APR with 1.5 basis points and $2,000 in fees. Property taxes are $3,600 and Casualty Insurance is $1,200.

a. How expensive of a home can you purchase today? b. What would your total amount due at closing be? (assuming no credits for prepaid property taxes)