Final answer:
The client's stable income as a paralegal and ability to afford a mortgage payment suggest that she meets the lender's expectation for continued employment.
Step-by-step explanation:
Based on the information provided, the client has been a paralegal for five years and earns $56,400 per year. She has been working part-time at an ice cream parlor and has saved $12,000 toward a down payment for a home. Now, she wants to buy a single-family home near a good school for less than $150,000 in the next three months. To determine if she meets a lender's expectation for continued employment, we need to consider her income stability and ability to afford the mortgage payment.
Generally, lenders look for consistent income and job stability when approving a mortgage. In this case, the client has been working as a paralegal for five years, which demonstrates stability in her primary job. However, if she no longer needs to work a second job, it suggests that her primary job as a paralegal provides sufficient income to cover her expenses, including the mortgage payment.
To assess affordability, we need to calculate the client's debt-to-income (DTI) ratio. The DTI ratio compares the client's monthly debt payments (including potential mortgage payment) to her monthly income. Lenders typically look for a DTI ratio below 43%.
Let's assume the client's monthly gross income is $4,700 (divide $56,400 by 12). If we deduct her other monthly debts (such as car loan, student loan, credit card payments) from her gross income, we can calculate her monthly available income for a mortgage payment.
Once we have the available income, we can estimate the maximum monthly mortgage payment she can afford using a mortgage calculator. Based on the provided information, it is likely that the client meets the lender's expectation for continued employment, given her stable income as a paralegal and her ability to afford a mortgage payment within the lender's guidelines.