Case summary:
J and R agreed to be married to each other and the bungalow in which J was residing before seems too small for newlyweds, so J and R are thinking whether to move to another rental apartment or to purchase a home of their own. They visit to their local banker to get an idea of the home they can afford with their combined incomes.
Characters in the case: J and R.
Adequate information: The combined checking account of R and J is $4,300.
Combined savings account of J and R is $55,200.
Combined emergency fund savings account of J and R is $19,100.
IRA balance is $24,000.
Cars worth is $12,000 of J and $20,000 for R.
Student loan balance is 0.
Credit card balance is 0.
Car loan amount is $8,000.
Annual net income of J is $31,500 and R is $59,000.
Monthly utilities expenses are $160.
Monthly food expenses $325.
Monthly Gas/ maintenance expenses are $275.
Credit card payment is $0.
Car loan payment is $289.
Entertainment is $300.
To determine:
The affordable mortgage amount that would be suggested by lending institutions and comparison of it with the traditional financial guideline amount.
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Personal Finance, FIN 2100 Kapoor 12th edition, University of Central Florida
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