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Compute the monthly installment of the mortgage loan

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Reference no: EM133042815

Question - Kenneth is expected to receive an inheritance of about $250,000 from his grandmother's estate in a few months' time. He is eyeing to buy a 1-bedder condominium so that he can stay on his own. The price of the property is $1,000,000. He is offered a 30-year mortgage loan of $750,000 at an interest rate of 1.3%.

Required -

(1) Compute the monthly installment of the mortgage loan.

(2) Analyse and discuss how the Mortgage Servicing Ratio (MSR) and Total Debt Service Ratio (TDSR) will impact his plan to purchase the $1m condo. Please show your workings.

Reference no: EM133042815

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