Reference no: EM133103885
Question - Jamie would like to purchase a condo worth $650,000 with condo fees (including utilities) of $500/mo, annual taxes of $2,400 and closing costs of $4,500.
-She works as a Marketing Coordinator earning $85,000/yr gross income (net income $61,000)
-Her current expenses include rent ($2,500/mo), food & clothes ($500/mo), cell & intranet ($100/mo), gym membership ($50/mo), travel/entertainment ($200/mo), miscellaneous ($150/mo)
-Assets include: a car ($10,000), RRSPs ($30,000), a savings account ($20,000) and a recent inheritance of $100,000
-Liabilities include: a car loan ($150/mo, $2,000 outstanding), a credit card with a $10,000 limit paid in full monthly.
Required - Based on the information above show your calculations for each of the following questions:
Calculate Jamie's current monthly cash flow.
In order to purchase the condo, determine 2 down payment options (high ratio & conventional). How much would the down payment be for each option and where would Jamie get the money from?
Calculate Jamie's monthly mortgage payment if she had a conventional mortgage on her new condo by selecting a 5-year term at a fixed rate of 3.85%, with a 25 year amortization.
Calculate Jamie's Gross Debt Service Ratio if she owned the condo.
Calculate Jamie's Total Debt Service Ratio if she owned the condo.
If Jamie had a good credit score, do you think she would be approved for this mortgage? Why?
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