Q2. Tom and Gwen have an adjusted gross income of $144,112. Their monthly mortgage payment for the house they want would be $1,483. Their annual property tax would be $9,330 and the homeowner’s insurance premium would cost them $1,099 per year. They have a monthly $444 car payment and their credit card monthly payment averages $4,021.

b. Based on the front-end ratio, would the bank lend them $220,000 to purchase the house they want?

Q2. Tom and Gwen have an adjusted gross income of $144,112. Their monthly mortgage payment for the house they want would be $1,483. Their annual property tax would be $9,330 and the homeowner’s insurance premium would cost them $1,099 per year. They have a monthly $444 car payment and their credit card monthly payment averages $4,021.

d. Based on the back – end ratio, would the bank lend them $220,000 to purchase the house they want?

Q3. Ted has an adjusted gross income of $120,006. He wants a house that has a monthly mortgage payment of $1,921 and annual property taxes of $7,112. His semiannual homeowner’s insurance would be $897. Ted has a credit card bill that averages $300 per month.

a. What is the front-end ratio?

Q3. Ted has an adjusted gross income of $120,006. He wants a house that has a monthly mortgage payment of $1,921 and annual property taxes of $7,112. His semiannual homeowner’s insurance would be $897. Ted has a credit card bill that averages $300 per month.

b. What is the back-end ratio?

Q3. Ted has an adjusted gross income of $120,006. He wants a house that has a monthly mortgage payment of $1,921 and annual property taxes of $7,112. His semiannual homeowner’s insurance would be $897. Ted has a credit card bill that averages $300 per month.

c. Assume that his credit rating is good. Based on the back-end ratio, would the bank offer him a loan?

Q3. Ted has an adjusted gross income of $120,006. He wants a house that has a monthly mortgage payment of $1,921 and annual property taxes of $7,112. His semiannual homeowner’s insurance would be $897. Ted has a credit card bill that averages $300 per month.

d. Based on the front-end ratio, would the bank offer him a loan?

Q4. The Sinclair’s have an adjusted gross income of $117,445. They are looking at a new house that would carry a monthly mortgage payment of $1,877. Their annual property taxes would be $6,780, and their semi-annual homeowner’s insurance would be $710.

a. Find the front-end ratio.

Q4. The Sinclair’s have an adjusted gross income of $117,445. They are looking at a new house that would carry a monthly mortgage payment of $1,877. Their annual property taxes would be $6,780, and their semi-annual homeowner’s insurance would be $710.

b. Based on the front-end ratio, would the bank offer him a loan?

Q4. The Sinclair’s have an adjusted gross income of $117,445. They are looking at a new house that would carry a monthly mortgage payment of $1,877. Their annual property taxes would be $6,780, and their semi-annual homeowner’s insurance would be $710.

c. The Sinclair’s have a monthly car loan of $430, and their average monthly credit card bill is $5,100. Mr. Sinclair is also paying $1,000 per month in child support from a previous marriage. Compute the back-end ratio.

Q4. The Sinclair’s have an adjusted gross income of $117,445. They are looking at a new house that would carry a monthly mortgage payment of $1,877. Their annual property taxes would be $6,780, and their semi-annual homeowner’s insurance would be $710.

d. If the bank used both the front-end ratio and back-end ratio to decide on mortgage approval, would the Sinclair’s get their mortgage?