Chapter 5 Financial Planning Exercise & Home affordability analysis Use Worksheet 5.3. Rachel and Alexander Hamson need to calculate the amount they can afford to spend on their first home. They have a combined annual income of $67,500 and have $37,000 available for a down payment and closing costs. The Harrisons estimate that homeowner's insurance and property taxes will be $125 per month. They expect the mortgage lender to use a 29 percent of monthly gross income) mortgage payment affordability ratio, to lend at an interest rate of 6 percent on a 30-year mortgage, and to require 15 percent down payment. Based on this information, use the home affordability analysis form in Worksheet 5.3 to determine the highest priced home the Harrisons can afford, Assume that closing costs are one-half of the down payment. Round the answer to the nearest dollar 5