Ann wants a mortgage to buy a house. ann gives the following information to the bank:

income: $240k/year or 20k/month

average monthly debt: $2k

estimated monthly taxes + insurance: $700

down-payment: $50k saved

-ann’s down-payment will be $50k, she will take out a mortgage for the remainder

ann qualifies for a 30 year fa-cpm-frm (monthly payments & monthly compounding) with:

annual interest rate: 4%

income test: (28%/36%)

collateral test: ltv≤95%→b0≤19*dp0

closing costs + buy-down points: $5,000 + 1.75% of the balance at origination.

1.2: based on the fe dti what is the biggest payment ann can make?

1.3: based on the be dti what is the biggest payment ann can make?

1.4: based on both the fe & be dti what is the biggest payment ann can make?

1.5: based on both the fe & be dti what is the biggest loan ann can get?

1.6: based the ltv test and ann’s $50k down-payment, what is the biggest loan ann can get?

1.7: based on the income & collateral tests, what is the biggest loan ann can get?

1.8: based on the income & collateral tests, what is the biggest payment ann can make?

1.9: if ann makes a 50k down-payment, how much house can ann afford?

1.10: how much are ann’s total mortgage closing costs?