You have been shopping around for your first home. You have found your dream home and...

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You have been shopping around for your first home. You have found your dream home and are determined to get a conventional mortgage. The purchase price of the home is $180,000 and you have $9,000 (5%) saved for a down payment. The mortgage interest rate is 4% and you plan to finance your mortgage for 25 years. Using the information below and the GDS and TDS calculations, will you be approved for this mortgage? Your gross annual income is $65,000. Your expenses each month. $300 payment on auto loan $60 auto insurance $175 transportation (gas, oil changes etc) • $325 food The expenses on the home would be Property taxes $288 Utilities (heat) $75 Home insurance $125 ● . . ● . Gross monthly income Multiply by GDS or TDS % Subtract shelter costs Subtract other debts Affordable Monthly Mortgage Payment Divide by Mortgage Payment Factor (pg.234) Multiply by $1,000 Affordable Mortgage Amount Divide by the financing % Affordable Home Purchase Price GDS Guidelines I TDS Guidelines You have been shopping around for your first home. You have found your dream home and are determined to get a conventional mortgage. The purchase price of the home is $180,000 and you have $9,000 (5%) saved for a down payment. The mortgage interest rate is 4% and you plan to finance your mortgage for 25 years. Using the information below and the GDS and TDS calculations, will you be approved for this mortgage? Your gross annual income is $65,000. Your expenses each month. $300 payment on auto loan $60 auto insurance $175 transportation (gas, oil changes etc) • $325 food The expenses on the home would be Property taxes $288 Utilities (heat) $75 Home insurance $125 ● . . ● . Gross monthly income Multiply by GDS or TDS % Subtract shelter costs Subtract other debts Affordable Monthly Mortgage Payment Divide by Mortgage Payment Factor (pg.234) Multiply by $1,000 Affordable Mortgage Amount Divide by the financing % Affordable Home Purchase Price GDS Guidelines I TDS Guidelines

Answer rating: 100% (QA)

SOLUTION 299 From the FBD PP A ... View the full answer