Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 1. based on each of the following three methods, w

1. Based on each of the following three methods, what is (a) the maximum monthly...

60.1K

Verified Solution

Question

Finance

1. Based on each of the following three methods, what is (a) the maximum monthly mortgage payment, (b) maximum mortgage size for which you qualify, and (c) value of the home you can afford to buy

  • PITI Ratio
  • PITI Plus
  • 80% of the Appraised Value Rule

2. How would your answer change for a 15-year rather than a 30-year mortgage?

3. How would your answer change if the mortgage interest rate increased to 8%?

4. Based on these calculations, what is the maximum value of the home and mortgage you would be willing to buy?

Annual gross income = $80,000

Estimated monthly real estate insurance and taxes = $300

The anticipated interest rate on a mortgage loan: 4%

Mortgage maturity: 30 years

Current non-mortgage monthly debt payments = $500

Funds available for down payment and closing cost = $25,000

Closing cost estimates = $5,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students