Final answer:
To find the maximum monthly mortgage payment, calculate 36% of the monthly income, which is $1,080 for an income of $3,000. The sum of the other monthly debts, $450, is subtracted from this amount to arrive at the maximum mortgage payment of $630.
Step-by-step explanation:
The question is regarding the maximum monthly mortgage payment a borrower with a stable monthly income of $3,000 would qualify for, given their existing monthly debts and using the conventional total debt to income ratio of 36%.
To calculate this, the total of the monthly debts is summed up and subtracted from the maximum allowable total monthly debt payment (which is 36% of the borrower's income). Then, the remaining amount is the maximum allowable monthly mortgage payment.
First, calculate 36% of the stable monthly income:
36% of $3,000 = 0.36 * $3,000 = $1,080.
This is the total debt payment allowed per month. Now, subtract the other monthly debts to find the maximum mortgage payment:
Total monthly debts = $200 + $200 + $50 = $450.
Maximum mortgage payment = $1,080 - $450 = $630.
Therefore, the borrower would qualify for a maximum monthly mortgage payment of $630.