The Schusters have saved $65,000 for the down payment on a home Their gross monthly income is $6300 They want to know the maximum conventional mortgage loan for which they can qualify in order to determine the highest price they can pay for a home They have 18 payments of $600 per month remaining on their car loan Their bank has upper limits of 32 for the GDS ratio and 40 for the TDS ratio a Allowing for property taxes of $300 per month and heating costs of $225 per month, what maximum monthly mortgage payment do the GDS and TDS ratios permit b What is the maximum mortgage loan for which the Schusters can qualify (Use a 25 year amortization and an interest rate of 5 14 compounded semiannually for a five year term Round the answer to the nearest $100 ) c Based on a $65,000 down payment and the maximum loan from part (b), what is the highest price they can pay for a home Round the answer to the nearest $100

Question: The Schusters have saved $65,000 for the down payment on a home. Their gross monthly income is $6300. They want to know the maximum conventional

The Schusters have saved $65,000 for the down payment on a home. Their gross monthly income is $6300. They want to know the maximum conventional mortgage loan for which they can qualify in order to determine the highest price they can pay for a home. They have 18 payments of $600 per month remaining on their car loan. Their bank has upper limits of 32% for the GDS ratio and 40% for the TDS ratio.
a. Allowing for property taxes of $300 per month and heating costs of $225 per month, what maximum monthly mortgage payment do the GDS and TDS ratios permit?
b. What is the maximum mortgage loan for which the Schusters can qualify? (Use a 25-year amortization and an interest rate of 5.14% compounded semiannually for a five-year term. Round the answer to the nearest $100.)
c. Based on a $65,000 down payment and the maximum loan from part (b), what is the highest price they can pay for a home? Round the answer to the nearest $100.

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aThe maximum monthly mortgage payment that the GDS ratio permits is 1445The maximum monthly mortgage payment that the TDS ratio permits is 1605 The GD... View full answer

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