Joannie wants to purchase a house that is listed for $376,000. The bank's appraiser estimates that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Joannie wants to purchase a house that is listed for $376,000. The bank's appraiser estimates that the lending value of the property is $375,000. Joannie's gross annual income is $60,000 per year. The bank applies an 80% loan-to-value ratio and a gross debt service ratio of 32%. Property taxes amount to $3,000 per year. Assume that this lender demands a 25-year amortization period and monthly payments at a contract rate of j2 = 4%. The Bank of Canada's posted 5-year rate is 5% per annum, %3D compounded semi-annually. How much can Joannie borrow, given the stress test borrower qualification rules for uninsured mortgages, rounded to the nearest $1. Which constraint is binding? $209,642; loan-to-value $277,932; gross debt service ratio $211,001; gross debt service ratio O $310,689; loan-to-value Joannie wants to purchase a house that is listed for $376,000. The bank's appraiser estimates that the lending value of the property is $375,000. Joannie's gross annual income is $60,000 per year. The bank applies an 80% loan-to-value ratio and a gross debt service ratio of 32%. Property taxes amount to $3,000 per year. Assume that this lender demands a 25-year amortization period and monthly payments at a contract rate of j2 = 4%. The Bank of Canada's posted 5-year rate is 5% per annum, %3D compounded semi-annually. How much can Joannie borrow, given the stress test borrower qualification rules for uninsured mortgages, rounded to the nearest $1. Which constraint is binding? $209,642; loan-to-value $277,932; gross debt service ratio $211,001; gross debt service ratio O $310,689; loan-to-value
Expert Answer:
Answer rating: 100% (QA)
C 211001 gross debt service ratio EXPLANATION Joannies maximum borrowing amount is gi... View the full answer
Related Book For
A Survey of Mathematics with Applications
ISBN: 978-0134112107
10th edition
Authors: Allen R. Angel, Christine D. Abbott, Dennis Runde
Posted Date:
Students also viewed these accounting questions
-
The Magic Pumpkin Limousine Company wants to purchase a car entertainment system for one of its automobiles. The entertainment system vendor has offered to finance the $2,000 purchase over one year...
-
The Browns want to purchase a house that costs $150,000. They plan to take out a $120,000 mortgage on the house and put $30,000 as a down payment. The bank informs them that with a 15-year mortgage...
-
You are planning to purchase a house that costs $480,000. You plan to put 20% down and borrow the remainder. Based on your credit score, you believe that you will pay 3.25% on a 30-year mortgage....
-
PepsiCo, Inc.s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. The complete annual reports of PepsiCo and Coca-Cola,...
-
The 2012 IFRS-based balance sheet published by Volkswagen AG, a well-known German automaker, listed an account called provisions (divided into current and non-current categories) with a total balance...
-
All-Star Automotive Company experienced the following accounting events during 2016: 1. Performed services for $25,000 cash. 2. Purchased land for $6,000 cash. 3. Hired an accountant to keep the...
-
Application of data analytics Indicate which type of data analytics, 1 through 4, is described in each of the following statements describing a data analytics application, \(a\) through \(h\). Data...
-
K. Meissner, S. Cohen, and E. Hughes are forming a partnership. Meissner is transferring $50,000 of personal cash to the partnership. Cohen owns land worth $15,000 and a small building worth $80,000,...
-
Question Bob offers to sell his bike to Sue for $100 and promises to keep his offer open for five days. Sue thanks him and leaves. At this point, Bob may: Responses Revoke the offer by direct...
-
Mid-Valley Travel Agency (MVTA) has offices in 12 cities. The company believes that its monthly airline bookings are related to the mean income in those cities and has collected the following data:...
-
Could someone help me describe the concept of Data Binding in Angular. Also, if this could be keep this simple would appreciate.
-
What are auditing capabilities available in SQL Server? Which is considered a remediation server? For SQL Server what security design considerations should be considered before installation?
-
1) Please use motivation theories to analyze how WalMart motivates its employees. 2) Please conduct a SWOT analysis for WalMart and discuss reasons for WalMart's bad reputation over the years. 3)...
-
You must include source reference citations in-text and a reference list of complete citations, in support of your essay. Failure to include references will result in loss of points. FACTS: Kadie,...
-
1. Why JAPAN is the most efficient avenue for marketing hospitality facility (hotels)? Why you think it is the most efficient avenue to market the facility to its demographic there? 2. Locate two...
-
Conceptual framework projects continue to be undertaken which rely on information qualities such as'representative faithfulness', 'neutrality', 'reliability', etc., which presume a concrete,...
-
Create an HTML file, ThreeSquares.htmi, that displays red, white, and blue squares using SVG. Create an HTML file named BullsEye.html that uses SVG circles to create a bullseye-like graphic. Create...
-
Complete problem P10-21 using ASPE. Data from P10-21 Original cost ................................................................. $7,000,000 Accumulated depreciation...
-
The difference between the measures of two supplementary angles is 102. Determine the measures of the two angles.
-
Reduce each fraction to lowest terms. 6/9
-
Two fair dice are rolled one after the other. Construct a sample space and determine the probability that the sum of the dots on the dice total. 3 if the first die is a 1.
-
Which document lists the components needed to manufacture a specific product? a. operations list b. master production schedule c. bill of materials d. production order
-
This chapter noted many of the benefits that can arise by integrating the HRM and payroll databases. Nevertheless, many companies maintain separate payroll and HRM information systems. Why do you...
-
Most costs are locked in at which stage in the production cycle? a. product design b. production planning c. production operations d. cost accounting
Study smarter with the SolutionInn App