2.Aaron, 34 and Rita, 31 considering to buy their first house. Thecouple has two kids. Aaron and Rita currently working in KotaKinabalu. Their current combined gross annual income is RM65,000.They own two cars with a hire purchase balance of RM32,000. Theyhave a total assets worth RM35,000, which are mostly savings forretirement. Rita has always been cautious about spending largeamounts of money, but Aaron really likes the idea of owning theirown home. They do not have a budget but they do keep track of theirexpenses, which amounted to RM55,000 last year including taxes andrental expenses(RM750 monthly). They pay all credit card bills on amonthly basis and do not have any other debt or loans outstanding.Other than that, they do not spend a great deal of time trackingtheir finances.
a.What financial statements should Aaron and Rita prepare to beginrealizing their home purchase goal? What records should they use tocompile these statements?
b. Useworksheets to calculate their net worth and income surplus. Howdoes renting a house will be differ from owning the house as far asthese statements are concern?
c.Calculate and interpret their month’s living expenses covered ratioand their debt ratio.
d.Aaron and Rita has an option either to buy new under developmentproperty from the developer or buying a complete house from theexisting owner. Discuss how this options will be differ from eachother.
e. Thecouple decide to buy house and agree either to individually orjointly apply for the bank loan. Advice the couple by suggesting atleast three properties available in the market and based on theoption of mortgage facility from three commercial bank of yourchoice. Calculate the maximum price of the house that they canafford based on their financial standing and your selected threecommercial bank terms and conditions.
