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Sarah’s gross salary is $200,000 per year. She is interested in purchasing a $600,000 house. She...

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Finance

Sarah’s gross salary is $200,000 per year. She is interested inpurchasing a $600,000 house. She will make a down payment of 20%and take out a 15 year, 4.5% fixed rate mortgage. The taxes plusinsurance is $8000. In addition, she has student debt and makesannual payments of $6000 per year. What is the Gross Debt Serviceand Total Debt Service ratio? If the bank requires that theseratios must be less than 30 and 35% respectively, can she obtainher mortgage?

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Sarahs Gross debt service ratio Annual mortgage payment Annual taxes plus insurance on the property annual gross income We know that the cost of house is 600000 and down payment is 20 Therefore Amount of mortgage after 20 of down payment 600000 120 600000 08 480000 A    See Answer
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Sarah’s gross salary is $200,000 per year. She is interested inpurchasing a $600,000 house. She will make a down payment of 20%and take out a 15 year, 4.5% fixed rate mortgage. The taxes plusinsurance is $8000. In addition, she has student debt and makesannual payments of $6000 per year. What is the Gross Debt Serviceand Total Debt Service ratio? If the bank requires that theseratios must be less than 30 and 35% respectively, can she obtainher mortgage?

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