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You are a loan officer working at Syfield Mortgage Corp

Finance

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You are a loan officer working at Syfield Mortgage Corp. A client, named Sara Wilson, has come to you to see if she how much she is qualified for a mortgage loan After sitting down with her, you came to know the following information about her financial situation:

 

Sara’s yearly salary is: $101,800 per year

Sara wants to make a 15% down-payment.

 

Based on your experience as well as speaking with her, you came to know about the following information about the property she is looking at:

 

Property tax: $3,800 / year

Heating bill: $260 / month

 

She also has the following liabilities

Car loan payment: $550 / month

Credit card payment: $275 / month

 

Currently typical mortgage rate is 5.5%. Sara is looking to pay-off the mortgage early and wants payment to be based on a 20 years amortization.

 

a) What is the maximum loan she can qualify for based on GDSR and TDSR?

b) What is the estimated value of the house she can purchase (ignore closing cost).