Five years have passed and Jamie Lee, $34,$ is considering taking the plunge$--$not only is she engaged to be married, but she is also deciding on whether to purchase a new home.

Jamie Lee$$s cupcake caf$$ is a success! It has been open for over a year now and has earned itself rave reviews in the local press and from its regular customers who just cannot get enough of her delicious varieties of cupcakes. One such customer, who stopped by on a whim in the caf$$s first week of business, is Ross. After a whirlwind courtship, Ross, a self$-$employed web designer, proposed, and Jamie Lee agreed to be his wife.

The bungalow that Jamie Lee has been renting for the past five years is too small for the soon$-$to$-$be newlyweds, so Jamie Lee and Ross have purchased a brand new three$-$bedroom, $2(1)/(2)$ bath home in a quiet neighborhood for $$292,000.$

Use the provided information and the table below to calculate the affordable mortgage amount that would be suggested by a lending institution based on Jamie Lee and Ross$$s income. You will need to make note of the purchase price $($above$)$ of their home for future questions.

Use the following for Jamie Lee and Ross's calculations:

$10\%$ down payment

$$600$ per month for estimated combined property taxes and insurance

$6\%$ interest rate for $30$ years

Refer to Exhibit $9-9$ for current mortgage ratesCurrent Financial Situation

Step $1$

Determine your monthly gross income $($annual gross income $12)$

Step $2$

With a down payment of at least $5\%,$ lenders use $33\%$ of monthly gross

income as a guideline for PITI $($principal$,$ interest, taxes, and insurance$)$

and $38\%$ of monthly gross income as a guideline for PITI plus other debt

payments. Enter $33\%$ or $38\%$ depending upon whether other debt

payments are present.

Step $3$

Subtract other debt payments $($such as payments on an auto loan$),$ if

applicable.

Subtract estimated monthly costs of property taxes and homeowner's

insurance.

Affordable monthly mortgage payment