4. A general rule of thumb is that your monthly mortgage payment should not exceed 25%...

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4. A general rule of thumb is that your monthly mortgage payment should not exceed 25% of your household's gross monthly income. Consider the situation of Jerry and Tracy, who just committed to a $400,000 mortgage on their dream home. They have reduced their financing choices to a 30-year conventional mortgage at 5% APR, or a 30-year interest-only mortgage at 5% APR. 4-1. (2 points) What is the monthly payment for the conventional mortgage? Do they qualify for the conventional mortgage? Why? 4-2. (2 points) What is the monthly payment for the interest-only mortgage? Do they qualify for the interest-only mortgage? Why? 4. A general rule of thumb is that your monthly mortgage payment should not exceed 25% of your household's gross monthly income. Consider the situation of Jerry and Tracy, who just committed to a $400,000 mortgage on their dream home. They have reduced their financing choices to a 30-year conventional mortgage at 5% APR, or a 30-year interest-only mortgage at 5% APR. 4-1. (2 points) What is the monthly payment for the conventional mortgage? Do they qualify for the conventional mortgage? Why? 4-2. (2 points) What is the monthly payment for the interest-only mortgage? Do they qualify for the interest-only mortgage? Why?

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SoluHon The maximum monthly payment they Can make i3 25 ... View the full answer