Reference no: EM133274911

Tracey would like to purchase a condo worth $450,000 with condo fees (includes utilities) of $400/mo, annual taxes of $1,800 and closing costs of $4,500.

She works as a Marketing Coordinator earning $90,000/yr gross income (net income $63,000)

Her current expenses include rent ($1,500/mo), food and 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 $50,000

Liabilities include: a car loan ($150/mo, $900 outstanding), a credit card with a $10,000 limit paid in full monthly.

Based on the information above show your calculations for each of the following questions:

Calculate Tracey's current monthly cash flow. Does she have a cash flow surplus or shortfall?

To help Tracey understand how much she will need for a down payment: a) determine 2 down payment options/amounts for Tracey (high ratio & conventional); b) identify Tracey's source of funds for the down payment

Calculate Tracey's monthly mortgage payment if she had a conventional mortgage on her new condo with a 5-year term at a fixed rate of 5.35%, and a 25 year amortization

Calculate Tracey's Gross Debt Service Ratio if she owned the condo

Calculate Tracey's Total Debt Service Ratio if she owned the condo

If Tracey had a good credit score do you think she would be approved for this mortgage? Why?