Final answer:
To determine the affordable monthly mortgage payment for an annual income of $48,000 with a monthly auto loan payment of $320, one must calculate 28% of their monthly income and subtract the auto loan payment. The closest answer to the affordable amount would be $1,200, assuming a possible typo in the options provided.
Step-by-step explanation:
To determine the affordable monthly mortgage payment when your yearly gross income is $48,000 and you have a monthly auto loan payment of $320, you can follow a general rule used by lenders that states housing expenses should not exceed 28% of your gross monthly income. So, first calculate your gross monthly income, which is $48,000 divided by 12 months, equalling $4,000 per month. From this amount, 28% is considered to find the maximum amount for housing expenses. The calculation goes as follows:
However, you also need to subtract your monthly auto loan payment of $320 from the available amount for housing:
Therefore, the affordable monthly mortgage payment would be $800.
Reviewing the given multiple choice options, none of them exactly match our calculated figure. It's possible there has been an oversight in the creation of the question or the expectations for additional budget considerations are not reflected in the options provided. The closest appropriate choice that does not exceed the calculated amount would be $1,200, assuming that this is a typo, and the question intended to ask for a maximum cap rather than the exact affordable payment.