} ww** Title: Case Study - Robert & Angela: Buying Their First Home Robert and Angela are newlyweds, and they are considering buying their first home now that the wedding is behind them and they are settled into their careers. Robert is a teacher, and Angela works in marketing. They are currently living with Angela's parents and are looking at buying a townhouse close to the school where Robert teaches. Angela works from home, but she will have to travel to the office a couple of days a week. They are meeting with their financial advisor at the bank to get an idea of what they can afford to spend on a home. They have been working hard to save towards their down payment. They have $90,000 from savings and wedding gifts, and it is equally split between each of their Tax-Free Savings Accounts. They have provided you with the following information about their current financial situation: Income: Amount Robert's Income $65,000 Angela's Income $74,000 Assets: Chequing Account $3,000 Savings - TFSA's (Robert and Angela) $90,000 Car $15,000 Emergency Fund - TFSA $10,000 Liabilities: Student Loan Balance $9,000 Credit Card Balance $3,000 Current Monthly Expenses: Food $450 Gas and Car Maintenance $500 Minimum Credit Card payment $90 Student Loan Payment $270 Entertainment $500 Estimated Monthly Future Expenses: Property Tax $325 Heating $200 The current 5-year fixed mortgage rate is 4.1%. If the current Bank of Canada 5-year rate is 5.25% 1 how much would they qualify for now, assuming they must pass the stress test? (8 marks) If they spend the maximum, will they need a high-ratio mortgage (GE or CMHC insurance)? (2 marks) Explain to Robert and Angela what creditors look for when they apply for a mortgage? (5 marks)