You have just signed a contract to purchase your dream house. The price is $175,000 and you have applied for a $150,000, 30-year, 5.5% loan. Annual property taxes are expected to be $2,000. Hazard insurance will cost $400 per year. Your car payment is $600, with 36 months left. Your monthly gross income is $5,000. Calculate:

a. The monthly payment of principal and interest (PI).

b. One-twelfth of annual property tax payments and hazard insurance payments.

c. Monthly PITI (principal, interest, taxes, and insurance).

d. The housing expense (front-end) ratio.

e. The total obligations (back-end) ratio.

f. IF you were the lender, would you approve this loan? Why or why not?