Attempts

Average $/2$

$12.$ Can I afford this home? $-$ Part $2$

Can Hubert and Kate afford this home using the installment debt loan criterion? follows.

To assist in the preparation of the worksheet, Hubert and Kate also collected the following information:

Their financial records report a combined gross before$-$tax annual income of $$105,000$ and current $($pre$-$mortgage$)$ installment loan, credit card, and car loan debt of $$1,531$ per month.

Their property taxes and homeowner's insurance policy are expected to cost $$2,813$ per year.

Their best estimate of the interest rate on their mortgage is $7\mathrm{.}5\%,$ and they are interested in obtaining a $15-$year loan.

They have accumulated savings of $$32,500$ that can be used to satisfy the home's down payment and closing costs.

The lender requires a minimum $20\%$ down payment, and installment loan affordability ratios that range from a minimum of $33\%$ to a maximum of $38\%.$