Question
The Total Expense Ratio states that a mortgage payment should be less than
(
Bryan and his wife, Jane both work and have a combined gross income of
estimate the property taxes on their condo will be
year. Bryan takes the bus to work, but Jane has a car payment of
still paying off student loans for a combined total of
Find out how much of a monthly mortgage payment Bryan and Jane can afford.
Round your answer to the nearest cent.
(
Bryan and his wife, Jane both work and have a combined gross income of
estimate the property taxes on their condo will be
year. Bryan takes the bus to work, but Jane has a car payment of
still paying off student loans for a combined total of
Find out how much of a monthly mortgage payment Bryan and Jane can afford.
Round your answer to the nearest cent.
Ask by Reyes Hardy. in the United States
Feb 11,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
Bryan and Jane can afford a monthly mortgage payment of approximately $1,655.04.
Solution
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Extra Insights
To calculate how much monthly mortgage payment Bryan and Jane can afford, we first need to determine their monthly gross income. They have a combined annual gross income of $92,979, which translates to approximately $7,748.25 per month ($92,979 ÷ 12).
Next, we apply the Total Expense Ratio formula, focusing on the maximum housing expenses. First, we calculate 36% of their monthly gross income:
0.36 × $7,748.25 = $2,790.77.
0.36 × $7,748.25 = $2,790.77.
Now, we need to figure out their monthly housing expenses. Their property taxes and insurance together amount to:
($1,075 + $1,017) ÷ 12 = $173.33 per month.
($1,075 + $1,017) ÷ 12 = $173.33 per month.
Additionally, we need to account for other debts, including Jane’s car payment and their student loans, which total:
$203 + $757 = $960 per month.
$203 + $757 = $960 per month.
Now we can plug values into the Total Expense Ratio equation:
Max Housing Payment = $2,790.77 - $173.33 - $960 = $1,657.44.
Max Housing Payment = $2,790.77 - $173.33 - $960 = $1,657.44.
Thus, the maximum monthly mortgage payment that Bryan and Jane can afford is $1,657.44.
