### Assignment Instructions/ Description

Can someone help me with this and let me know if I filled this out correctly? This is due July 24th, 2023.�Image transcription textName:

Maria Lebedev

Date:

July 24, 2023

Housing Affordability and Mortgage Qualification

Purpose: To estimate the amount of affordable mortgage payment, mortgage amount, and home purchase price.

24

Financial Planning Activities: Enter the amounts requested to estimate the amount of affordable mortgage payment, mortgage amount, and home purchase price.

Suggested Websites:

www.realestate.com

homeloanlearningcenter.com

mtgprofessor.com

Suggested App:

Mortgage Calculator

Debt-to-Income Ratios

Method:

Front-end

Back-end

ratio (28%)**

ratio (36%)**

Step 1

Determine your monthly gross income (annual income divided by 12).

Enter annual income

$48,000

12

$4,000.00

$4,000.00

Step 2

With a down payment of at least 10 percent, lenders use 28 percent (front-end ratio) of monthly gross income as a

guideline for TIPI (taxes, insurance, principal, and interest) and 36 percent (back-end ratio) of monthly gross income

as a guideline for TIPI plus other debt payments.

X

0.28

0.36

$1, 120.00

$1,440.00

Step 3

Subtract other monthly debt payments (e.g., payments on an auto loan)

380

$380.00

and

an estimate of the monthly costs of property taxes and homeowner's insurance.

$300.00

$300.00

Affordable monthly mortgage payment

> > > > > > > >

> > > > > > >

$820.00

$760.00

Step 4

Your Personal Financial Plan

Divide this amount by the monthly mortgage payment per $1,000 based on current mortgage rates-an 8 percent, 30-

7.34000

7.34000

year loan, for example (see Exhibit 7-7)-and multiply by $1,000.

X

$1,000.00

$1,000.00

Monthly mortgage payment factor (exact) per

Enter rate:

8.00%

Exact factor is

each $1,000 in principal:

Enter term (years):

30

7.33765

Affordable mortgage amount

> > > > > > > >

> > > > > > > >

$111,717

$103,542

Step 5

Divide your affordable mortgage amount by 1 minus the fractional portion of your down payment (e.g., 1 - 0.1 with a 10

percent down payment).

Enter down payment (%'age):

10.00%

0.90

0.90

able home purchase price

$124,130

$115,047

** Note: The two ratios lending institutions use (step 2) and other loan requirements are likely to vary based on a

variety of factors, including the type of mortgage, the amount of the down payment, your income level, credit score,

and current interest rates. If you have other debts, lenders will calculate both ratios and then use the one that allows

you greater flexibility in borrowin

What's Next for Your Personal Financial Plan?

Identify actions you might need to take to qualify for a mortgage.

Discuss your mortgage qualifications with a mortgage broker or other lender.... Show more�