Calculate Peter and Lisa's (husband and wife) front end ratio. Below is their financialinformation:Monthly IncomePeter: $4,400.00Lisa: $3,400.00Present Mortgage Payment $2,000.00Auto Loan (Peter)$400.00Auto Loan (Lisa)$350.00Amex$45.00Capital One$450.00Student Loan$350.00Monthly Housing ExpenseMortgage: $2,000.00Front Ratio = (Monthly Housing Expense / Monthly Income)* 100 =(Round up the answer up to 2 digits)

Lets understand the basics.Front ratio also known as mortgage to income ratio. It is a ratio which…

Answered: Calculate Peter and Lisa's (husband and…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You and your spouse are in good health and have reasonably secure careers. You make about $75,500 annually and have opted for life insurance coverage of three times your salary through your employer. With your spouse's income, you are able to absorb ongoing living costs of $55,500 a year. You own a home with a $290,500 mortgage. Other debts include a $15,250 car loan, $7,100 student loan, and $4,050 charged to credit cards. In the event of your death, you wish to leave your family debt- free. One of your most important financial goals involves building an education fund of $101,000 to cover the costs of a four-year university program for each of your two children ages two and four. To date, you have accumulated $25,500 toward this goal in an RESP. Should you die, your beneficiaries would receive a $2,500 death benefit lump-sum payment from the Canada Pension Plan. You also have $35,500 in your company pension plan. Average funeral expenses are $13,600. Your other financial assets are…
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Carlos earns a gross income of $5,580 per month and applies for a mortgage with a monthly PITI of $1,339.20. Carlos has other financial obligations totaling $764.46 per month. If the lending ratio guidelines are as given in the table below. Lending Ratio Guidelines Mortgage Type Housing Expense Ratio Total Obligations Ratio FHA 29% 41% Conventional 28% 36% What type of mortgage, if any, would Carlos qualify for? O Carlos qualifies for an FHA mortgage under the lending guidelines, but not a conventional mortgage. O Carlos qualifies for a conventional mortgage under the lending guidelines, but not an FHA mortgage. O Carlos qualifies for both an FHA mortgage and a conventional mortgage under the lending guidelines. O Carlos qualifies for neither an FHA mortgage and a conventional mortgage under the lending guidelines.

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Calculate Peter and Lisa's (husband and wife) front end ratio. Below is their financial information: Monthly Income Peter: $4,400.00 Lisa: $3,400.00 Present Mortgage Payment $2,000.00 Auto Loan (Peter) 5400 Monthly Housing Expense Mortgage: $2,000.00