all ankual ihcome of $300,000. Jim is looking to buy a house with monthly property taxes of $1200 and monthly homeowner's insurance of $300. Jim has onthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 28% and a maximum back enc 5%. Considering both the front end DTI limit and the back end DTI limit, what is the most they will allow Jim to spend on a monthly mortgage payment? DA. $5,500.00 O B. $7,000.00 OC. $5,000.00 O D. $82,500.00

all ankual ihcome of $300,000. Jim is looking to buy a house with monthly property taxes of $1200 and monthly homeowner's insurance of $300. Jim has onthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 28% and a maximum back enc 5%. Considering both the front end DTI limit and the back end DTI limit, what is the most they will allow Jim to spend on a monthly mortgage payment? DA. $5,500.00 O B. $7,000.00 OC. $5,000.00 O D. $82,500.00

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Jill wants to buy a home. Her monthly gross income (GI) is $7,000. She currently has a car payment of $480/month. The bank wants her to escrow $450/month for taxes (T) and insurance (HI). The bank requires the following income and loan ratios; a minimum down payment of 20%, a P&I as a percent of GI ratio < 25%, a P, I, T, & HI as a percent of GI ratio < 28%, a P, I, T, HI and other debt service as a percent of GI ratio < 36%, and a LTV ratio of 80% or less. What is the maximum market value of a home that Jill could purchase given a current market rate on a 30-year fixed rate loan is 4.75%?
"Jim has an annual income of $240,000. Jim is looking to buy a house with monthly property taxes of $1000 and monthly homeowner s insurance of $200. Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 28% and a maximum back end DTI limit of 36%. Considering both the front end DTI limit and the back end DTI limit, what is the most they will allow Jim to spend on a monthly mortgage payment?"
The Allens are considering buying a house and need to figure out what they can afford and what a bank will lend them. Bill’s annual income is $165,000. Their monthly mortgage payment for the house they want would be $1,650. Their annual property taxes would be $9,000. The home-owner’s insurance premium would cost them $1,100 per year. They have a $550 per month car loan. Their average monthly credit card bill is $4,800. Will the bank lend them the money to purchase the house using the back end ratio with an acceptable range of 36% or less? NO- (53.03%)
The Schusters have saved $65,000 for the down payment on a home. Their gross monthly income is $6300. They want to know the maximum conventional mortgage loan for which they can qualify in order to determine the highest price they can pay for a home. They have 18 payments of $600 per month remaining on their car loan. Their bank has upper limits of 32% for the GDS ratio and 40% for the TDS ratio. a. Allowing for property taxes of $300 per month and heating costs of $225 per month, what, maximum monthly mortgage paymet do the GDS and TDS ratios permit? b. What is the maximum mortgage loan for which the Schusters can qualify? (Use a 25-year amortization and an interest rate of 5.14% compounded semiannually for a five-year term. Round the answer to the nearest $100.) c. Based on a $65,000 down payment and the maximum loan from part (b), what is the highest price they can pay for a home? Round the answer to the nearest $100.
Max Small has outstanding school loans that require a monthly payment of $1,000. He needs to buy a new car for work and estimates that this purchase will add $350 per month to his existing monthly obligations. Max will have $3,000 available after meeting all his monthly living (operating) expenses. This amount could vary by plus or minus 10%. Can Max afford the additional loan payment and should Max take on the additional loan payment? (calculate the DFL in tabular form for both the current and proposed loan payments using Max’s available $3,000 as a base and a 10% change.)
Taibi Hafid is considering the purchase of a used car. The price, including the title and taxes, is $10,500. Taibi is able to make a $2,500 down payment. The balance, $8,000, will be borrowed from his credit union at an interest rate of 10% compounded daily. The loan should be paid in 48 equal monthly payments. Compute the monthly payment. What is the total amount of interest Taibi has to pay over the life of the loan?
Mr. and Mrs. Murthy have a totally monthly gross income of $6000.00. They are interested in purchasing a house with a mortgage payment of $1300.00 per month, annual heating costs of $2100.00, and annual property taxes of $3675.00. Calculate the gross debt service ratio (GDSR). Determine if a bank is likely to offer them the mortgage. Justify your answer.
Lori earns $3,898 per month. She has a monthly rent payment of $980 along with average credit card payments of $325 and student loan payments of $250. She wants to finance a car but needs to determine her maximum car payment to keep her back end DTI at 39%. What would this payment be?
Amelia wants to buy a home and is applying for a conventional mortgage loan. Her gross monthly income is $6,200. She has 32 payments of $525 per month remaining on her car loan, and 19 payments of $215 per month remaining on her student loan. Her bank has upper limits of 36% for GDS and 43% for TDS. Allowing for property taxes of $400 per month and heating costs of $300 per month, what maximum monthly mortgage payment do the GDS and TDS limits permit?
Tom needs a car to commute to work and has found a suitable Honda Civic from a dealer for $8000. He has $3000 saved for it and can afford a monthly payment up to $250. Which of the following is the best (lowest total cost) financing option for him? O a. Make a $3000 deposit and take a two year loan with monthly payments of $221. O b. Make a $2000 deposit and take a three year loan with monthly payments of $185. O c. Make a $2500 deposit and take a two year loan with monthly payments of $241. O d. Make a $1000 deposit and take a three year loan with monthly payments of $210.
Kathy wants to buy a condominium selling for $95,000. The taxes on the property are$1500 per year, and homeowners' insurance is $336 per year. Kathy's gross monthly income is$4000. She has 15 monthly payments of $135 remaining on her van. The bank is requiring 20% down and is charging a 9.5% interest rate with no points. Her bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners' insurance that is less than or equal to 28% of her adjusted monthly income. (a) Determine the required down payment. (b) Determine 28% of her adjusted monthly income. (c) Determine the monthly payment of principal and interest for a 25-year loan. (d) Determine her total monthly payment, including homeowners' insurance and taxes. (e) Does Kathy qualify for the loan? (f) Determine how much of the first payment on the mortgage is applied to the principal. (g) Determine the total amount she pays for the condominium with a 25-year conventional loan.…
please use ms word not excel. (real state finance) 1. Jim has an annual income of $225,000. Apple bank has a maximum front end DTI limit of 28%, what is the most they will allow Jim to spend on monthly principal, interest, taxes and insurance? 2. Jim has an annual income of $225,000. Jim is looking to buy a house with monthly property taxes of $700 and monthly homeowner’s insurance of $300. Apple bank has a maximum front end DTI limit of 28%, what is the most they will allow Jim to spend on a monthly mortgage? 3. Jim has an annual income of $225,000. Jim is looking to buy a house with monthly property taxes of $700 and monthly homeowner’s insurance of $300. Jim has $625 in monthly student loan payments. Apple bank has a maximum back end DTI limit of 36%. Given the back end DTI constraint, what is the most they will allow Jim to spend on a monthly mortgage payment?

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