How much do you have to earn to afford this house

Assignment Help Accounting Basics

Reference no: EM132959734

1) Assume you are interested in purchasing a $350,000 house with the following characteristics:

· 80% Loan to Value Loan @ 4% interest (30yr, fully amortized)

· Property taxes = 1.2% of purchase price per year

· Homeowners Insurance = $1,000/yr

· Homeowners Association Dues = $200/mo

· Payment-to-Income Ratio = 28%

· Total Obligations-to-Income Ratio = 35%

A. How much do you have to earn to afford this house (assuming zero consumer debt)

B. Will you still be able to afford the house if you have $300/mo in student debt payments and a $200/mo car payment?

Reference no: EM132959734

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