How much can the woman pay for the home

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Reference no: EM132058641

A woman is looking to purchase her primary home in the Cleveland Suburbs. She has enough for a 20% down payment and an income of $70,000 per year.

Her FICO Score is 750. The prime Interest Rate at her bank for 30-year Mortgages is 4.25%. She has a car payment of $400 per month and a Student Loan Payment of $200 per month.

The home she finds has 70 Effective Property Tax Mills and Homeowner's Insurance Costs $50 per month on every $100,000 of Home Value.

How much can the woman pay for the home? How large of a mortgage will the bank allow her take out?

Reference no: EM132058641

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