1. Find the Gross Debt Service Ratio for the following situations, and state whether these houses...

  

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1. Find the Gross Debt Service Ratio for the following situations, and state whether these houses are affordable. a) The monthly mortgage payment is $805, monthly property taxes are $110, monthly heating costs are $74, and the gross monthly income is $3458. (2 marks) b) The monthly mortgage payment is $716, monthly property taxes are $120, monthly heating costs are $118, and the gross monthly income is $2280. (2 marks) p. Mr. and Mrs. Dupont are considering buying a split-level, four-bedroom house with a purchase price of $286,000. The Duponts can make a down payment of $42,000. Mr. Dupont's gross annual income is $63,300. Mrs. Dupont is working part-time while she attends university. Her gross annual income is $19,500. The Duponts are expecting their financial institution to offer them a fixed-rate mortgage rate of 3.5% over 15 years. The annual taxes on the property are $3760. The annual heating costs of the house are $3550. a) Calculate the Gross Debt Service Ratio. (4 marks) b) Can the Duponts afford this house? (1 mark) c) If the Duponts decide to amortize their mortgage over a 25-year period, can they afford this house? 1. Find the Gross Debt Service Ratio for the following situations, and state whether these houses are affordable. a) The monthly mortgage payment is $805, monthly property taxes are $110, monthly heating costs are $74, and the gross monthly income is $3458. (2 marks) b) The monthly mortgage payment is $716, monthly property taxes are $120, monthly heating costs are $118, and the gross monthly income is $2280. (2 marks) p. Mr. and Mrs. Dupont are considering buying a split-level, four-bedroom house with a purchase price of $286,000. The Duponts can make a down payment of $42,000. Mr. Dupont's gross annual income is $63,300. Mrs. Dupont is working part-time while she attends university. Her gross annual income is $19,500. The Duponts are expecting their financial institution to offer them a fixed-rate mortgage rate of 3.5% over 15 years. The annual taxes on the property are $3760. The annual heating costs of the house are $3550. a) Calculate the Gross Debt Service Ratio. (4 marks) b) Can the Duponts afford this house? (1 mark) c) If the Duponts decide to amortize their mortgage over a 25-year period, can they afford this house?

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