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Determine what is the maximum house payment can afford

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Problem 1: If your annual gross income is $62,000 and you have one monthly car payment of $335 and a monthly student loan payment of $225, what is the maximum house payment you can afford. Consider a standard 28% front-end ratio and a 36% back-end ratio. Also, to complete calculation, the annual property tax will be $3,600 and the annual homeowner's premium will be $360.

HINT: $62,000 divided by 12 = monthly income...then multiply by 28% for max PITI....and multiply monthly income by 36% for the max PITI, installment, and revolving monthly payments....you may have to make some adjustments to your PITI because lenders will not want Petunia to exceed the 36% back end ratio...

Reference no: EM132479283

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