Assuming a 28% lender's affordability ratio,estimated monthly property taxes and insurance of $250,a 25% down payment (of the purchase price),and an annual gross income of $84,800,calculate the maximum purchase price based on monthly income.The monthly payment will occur at the end of the month and you plan to pay off the mortgage over a 30-year period at a 6.25% annual interest rate.

Question

Quizplus · Accepted Answer

84,800/12 = 7,067 * .28 = $1,978.67
$1,978.67 - $250 = $1,728.67
Maximum mortgage:
n = 360
i = 6.25/12
PMT = 1728.67
FV = 0
PV = 280,757
x(0.75)= 280,757
x = 374,343

Assuming a 28% Lender's Affordability Ratio,estimated Monthly Property Taxes and Insurance