You qualify for a home loan of $$350,000$ at $7\%$ interest with a $30-$year term. Payments on the

loan are made monthly. You have savings of $$42,000$ and would like to pay this amount as a

down payment.

Considering all your sources of borrowing and cash, what is the most expensive home you

could purchase?

Assuming you make the $$42,000$ down payment and take the loan of $$350,000,$ what is the

initial loan$-$to$-$value ratio on this home loan?

Assume there is a financial meltdown and the value of the home falls by $15\%$ in the first

year. After $12$ months, your loan balance is $$346,445.$ What is the loan$-$to$-$value ratio after

one year?