How large of a mortgage will the bank allow him take out

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A man is looking to purchase a home in the Cleveland Suburbs. He has enough for a 20% down payment and an income of $70,000 per year. His FICO Score is 550. The prime Interest Rate for 30-year Mortgages is 5%. He has a car payment of $400 per month and a Student Loan Payment of $200 per month. The home he finds has 70 Effective Property Tax Mills and Homeowner’s Insurance Costs $50 per month on every $100,000 of Home Value. How much can the man pay for the home? How large of a mortgage will the bank allow him take out?

Reference no: EM131047644

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