Question

The Roberts family is applying for a 30-year FHA mortgage loan at 9.25% interest per year. Based upon the back-end ratio, what is the maximum FHA loan the family can afford? Use the most conservative FHA ratio. Their financial situation is as follows:

Item	Amount	Frequency	Time Remaining
Familly Income	65000	annual
Car loan	380	monthly	25 months
Student loans	230	monthly	70 months
Boat loan	380	monthly	3 months

Your Answer:

41 % back end ratio

Answer 1

Time nt Frequency Remainin Amount tem 65000 Familly Income annual monthly 25 months monthly 70 months monthly 3 months 380 Car loan Student loans 230 380 Boat loarn Back end ratio Total debt payment/Gross income Gross income 65000 Back end ratio 41% Total debt repayment 26650 Existing debt payments 4560 Car loan 2760 Student loans 4560 Boat loan Total 11880 Balance 14770 Rate 9.25% Year 30 Max loan $148,440.10 -PV(9.25%,30,14770,,