The Ungers have an adjusted gross income of $117,445. They are looking at a new house that would carry a monthly mortgage payment of $1,877. Their annual property taxes would be $6,780, and their semi-annual homeowner's premium would be $710.
a. Find their front-end ratio to the nearest percent.
b. Assume that their credit rating is good. Based on the front-end ratio, would the bank offer them a loan? Explain.
c. The Ungers have a monthly car loan of $430, and their average monthly credit card bill is $5,100. Mr. Unger is also paying $1,000 per month in child support from a previous marriage. Compute the back-end ratio to the nearest percent.
d. If the bank used both the front-end and back-end ratios to decide on mortgage approval, would the Ungers get their mortgage? Explain.