Jim has an annual income of $240,000.
Jim is looking to buy a house with monthly property taxes of $200 and monthly homeowner’s insurance of $100.
Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000.
Bank has a maximum payment-to-income limit of 35%.
Considering the payment-to-income limit, what is the most they will allow Jim to spend on a monthly mortgage payment?
If the rate for 30 year FRM is 6%, based on the answer in a) for maximum allowed monthly mortgage payment, what is the maximum amount bank will send to Jim for a 30 year FRM?
Bank has a maximum LTV of 70%. Based on this LTV and the answer for b) what’s the maximum value for a house that Jim can buy?