What is estimated maximum loan amount that they anticipate

Reference no: EM133665259

Problem: Tara Smith has submitted an application for a mortgage loan to finance a two-bedroom condo in Toronto. ABC Bank has provided the following relevant details: the Lending Value is $1,000,000, the Loan-to-Value Ratio is 70%, the Gross Debt Service Ratio is 30%, the interest rate and amortization period are 5% per annum and 25 years, respectively (MPF = 0.005816), the payment term is monthly, and additional property-related costs (property taxes, home insurance, utilities, etc.) amount to $10,000 per year. Given their gross annual household income of $150,000, what is the estimated maximum loan amount that they can anticipate from ABC Bank?

Reference no: EM133665259

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