Reference no: EM133119089
It is February 18, 2022, Asra and Yadi are looking to buy their first home but prices during this pandemic seem especially high. To come up with the down payment, they will need to dip into their Registered Retirement Savings Plan's (RRSP's) to take advantage of the Home Buyer's Plan (HBP). To date, Asra has made a total of $27,000 in contributions to her RRSP while Yadi has made $24,000 in total to his. Their RRSP's have grown over the years and the market value for Asra's RRSP is $38,763 while Yadi's RRSP is valued at $31,222. They are now looking to withdraw from their RRSPs under the HBP, for the which they will use as a total down payment on their dream home. They have turned to you for some help to their questions.
Asra and Yadi are going to the CIBC to discuss a potential mortgage. Based on the following information, calculate the Gross Debt Service (GDS) ratio. Asra's gross annual salary is $125,150, while Yadi's is $123,750. The property they are looking to purchase would result in monthly heating costs of $360, condo fees of $3,950 per year, while their annual property taxes would be $6,484. Asra's only debt is a car loan of $835 per month, while Yadi has a student loan of $220 per month.
Note: Asra and Yadi reside in Quebec Canada
Calculate the GDS ratio using a monthly mortgage payment of $5,572.