Question

Araceli earns $85,000 per year. Now that she has paid off her credit card debt, she is ready to buy a house. Araceli has a $200 car payment, no student loans, $300 in car insurance every 6 months and she estimates that her monthly utility bills will be $250 in her new house. If her bank requires no more than a 36% debt to income ratio, what would her maximum monthly mortgage payment be?

Answer 1

$2300

Explanation:

1. Her yearly allowable debt

36% × 85000 = 30600

2. Her monthly allowable debt

30600/12 = 2550

3. Her monthly existing debt

car payment = 200

car insurance = 300/6 =50

monthly utility bill = na this is an estimation

4. allowable debt - existing debt

2550 -200-50= 2300

ps: i may be wrong