You are considering purchasing a single-family property. The house you are interested in is currently listed for

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Question:

You are considering purchasing a single-family property. The house you are interested in is currently listed for $430,000. You’re talking with a mortgage lender that has quoted a
nominal annual interest rate of 4.25% with interest calculated and accrued based on the 30/360 day count convention. The mortgage loan requires monthly debt service
payments. The mortgage loan would fully amortize over a 180-month loan term. You are considering borrowing $375,000 to facilitate the purchase. Private mortgage insurance is
quoted at approximately $180 per month. The annual real estate tax bill is estimated at $7,500. The annual property insurance premium is estimated at $4,500. The property is
subject to a homeowners’ association with annual dues of $400. Your annual salary is $160,000.

A) What is the initial LTV?
B) What is the monthly loan (debt service) payment?
C) What is the total for otter monthly housing expenses?
D) What is the (monthly) payment-to-income ratio?
E) If the mortgage lender’s maximum payment-to-income ratio is 32%, what would
you estimate for the maximum loan amount?