Attempts Keep the Highest / 2 12. Can I afford this home? - Part 2 Can Poornima and Manuel afford this home using the installment debt loan criterion? Next week, your friends Poornima and Manuel want to apply to the fourth Global Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $215,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows. To assist in the preparation of the worksheet, Poornima and Manuel also collected the following Information: Their financial records report a combined gross before-tax annual income of $85,000 and current (pre-mortgage) Installment loan, credit card, and car loan debt of $1,240 per month Their property taxes and homeowner's insurance policy are expected to cost $2,150 per year. Their best estimate of the interest rate on their mortgage is 7,5%, and they are interested in obtaining a 15-year toan. They have accumulated savings of $50,500 that can be used to satisfy the home's down payment and closing costs. The tender requires a minimum 20% down payment, and installment loan affordability ratios that range from a minimum of 33% to a maximum of 38%. Use ether the table of monthly payments necessary to repay a $10,000 loan), your financial calculator or the maximum affordable mortgage loan Formula to complete the following home affordability worksheet (Note: When completing the form, round each dollar amount to the nearest whole doilar. Unless labeled differently, all of the following values represent dollar amounts. Also, some values calculated or used in the upper section of the table may also be used in the lower section. Round your percentage answer to two decimal places) vse other the cable of monthly payments (necessary to repay a $10,000 in your financial calculator, or the maximum affordable mortgage loan formula to complete the following home affordability worksheet (Note: When completing the form round each dollar amount to the nearest whole dollac Uniss labeled differently, all of the following values represent dollar amounts. Also, some values calculated or used in the upper section of the table may also be used in the lower section. Round your percentage answer to two decoral places. Monthly Payments Factors 3.0 536822 5.5 6.0 56.7789 $9.9551 63.2008 6.5 Maximum Affordable Mortgage Loan Formula 106.0655 79.0794 55.9956 58.450 108.5263 81.7083 68.7887 61.4087 111.0205 84.3057 71.6431 61.4301 113.5480 87.1107 74.5573 67.5207 116.1085 89.8828 77.5299 70.6776 118.7018 92.7012 30.5593 73.8993 121.3276 95.5652 83.6140 77.1816 123.9857 98.4740 86.7823 80.5227 126.6758 101.4267 89.9726 83.9196 70 66.5302 7.5 8.0 69.9215 23.3765 76.8913 30.4622 8.5 9.0 AN CA Home Affordability Workchant High Value Low Value Amount % 38% 3396 Home Affordability Worksheet Based on Installment Payments and Monthly Income 1. Annual income 2. Monthly income 3. Existing monthly installment payments 4. Edsting monthly installment payments as percentage of monthly income (9) 5. Lender's monthly installment loan affordability ratio 6. Maximum amount of total affordable installment debt 7. Maximum monthly mortgage payment (PITI) affordable based on installment loan ratio 3. Estimated monthly property tax and insurance payment 9. Maximum monthly loan payment (P and I only) 10. Expected Interest rate 11. Planned loan maturity (years) 12. Mortgage payment factor per $10,000 (from the Loan Maturity table) 13. Maximum loan based on mortgage payment factor (from the Loan Maturity table) 14. Required (20%) down payment 15. Maximum home price based on installment loan ratio 7.596 15 Given these results, which statement regarding Poornima and Manuels mortgage qualification process and the purchase of thole $215,000 target home is true? O Poornima and Manuel do not quality to purchase their $215,000 target home according to the Installment Debt Affordability Worksheet criterion. Poornima and Manuel quality to purchase their $215,000 target home according to the Installment Debt Affordability Worksheet criterion