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You are planning to buy a house, and have been saving up money to do so. You currently have $25,000 saved for a down payment and closing costs. You go to the bank for a mortgage. Assumptions:

– Closing costs are estimated to be 4% of the loan amount

– Your annual salary is $48,000, and the bank will allow you to borrow such that 28% of your pretax monthly salary goes to pay off the mortgage

– The current interest rate is 0.5% per month for a 30-year fixedrate mortgage

– How much can you borrow? What is the most you can offer on a house?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92846409

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