2. Mortgage Affordability. Seth and Alexandra Moore of Elk Grove
Village, Illinois, have an annual income of $110,000 and want to
buy a home. Currently, mortgage rates are 5 percent. The Moores
want to take out a mortgage for 30 years. Real estate taxes are
estimated to be $4,800 per year for homes similar to what they
would like to buy, and homeowner's insurance would be about $1,500
per year.
(a) Using a 28 percent front end ratio, what are...