Joanna earns a gross annual income of $72,456
The value of home is $137,000
She makes 20% down payment of home value.
Down Payment = 20% of $137,000
Amount for down payment = 0.20 x 137000
= $27,400
Amount for loan = Home value - Down Payment
= 137000 - 27400
= $109,600
Financing the rest amount for 25-year at 5% interest.
Monthly Payment for $1000 = $5.846
Monthly Payment for $1 = $0.005846
Monthly Payment for $109,600 = 109600 x 0.005846
= $640.72
(A) The mortgage amount she will borrow is $109,600
(B) Yearly gross income = $27,456
Monthly Gross income = $2,288
Monthly Mortgage Payment = $640.72
As we can see monthly payment is less than monthly income. Therefore, Yes, she can afford the loan.
( C) Monthly Mortgage Payment = $640.72
