5. Kanye and his wife, Kim, both work and have a combined gross income of $165,0

Question

5. Kanye and his wife, Kim, both work and have a combined gross income of $165,000 per year. They estimate the property taxes on their condo will be $2,100 an insurance would be about $1500 per year. Kim has a car payment of $200 per month and they are both still paying student loans for a combined total of $600 per month. a) Find out how much of a monthly mortgage Kanye and Kim can afford. b) Suppose the couple can get a 30 year loan with a rate of 3.5%, how large of a mortgage could they afford based on the payment you found in part a?

Explanation / Answer

(a)

we have

Income 13750 monthly Tax 175 monthly Insurance 125 monthly car payment 200 monthly Student loan 600 monthly TOTAL expenditure 1100 monthly hence monthly mortgage they can afford is 12650 monthly

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