Determine 28% of their adjusted monthly income. The Leungs decided to build a new house. The contractor

Question:

Determine 28% of their adjusted monthly income.

The Leungs decided to build a new house. The contractor quoted them a price of $144,500, including the lot. The taxes on the house would be $3200 per year, and homeowners’ insurance would cost $450 per year. They have applied for a conventional loan from a bank. The bank is requiring a 15% down payment, and the interest rate is with 2 points. The Leung’s annual income is $86,500. They have more than 10 monthly payments remaining on each of the following: $220 for a car, $175 for new furniture, and $210 on a college education loan. Their bank will approve a loan that has a total monthly house payment of principal, interest, property taxes, and homeowners’ insurance that is less than or equal to 28% of their adjusted monthly income.