You are ready to purchase your first home. Your annual salary is $87,000. You have been able to save $30,000 for a down payment, and the only debt you currently owe are your student loan with a payment of $300 a month and your car payment of $500 a month.

a. Given your current situation, how much can you afford for a house payment?

b. If you no longer have a car payment, what monthly mortgage payment could you qualify for, given your outstanding credit history?