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1. Jim has an annual income of $240,000. Apple bank has a maximum front end DTI...

1. Jim has an annual income of $240,000. Apple bank has a maximum front end DTI limit of 28%, what is the most they will allow Jim to spend on monthly principal, interest, taxes and insurance?

2. Jim has an annual income of $240,000. Jim is looking to buy a house with monthly property taxes of $140 and monthly homeowner’s insurance of $70. Apple bank has a maximum front end DTI limit of 28%, what is the most they will allow Jim to spend on a monthly mortgage?

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Expert Solution

GIVEN DATA FROM THE PROBLEM

ANNUAL INCOME =$240,000

DTI LIMIT OF 28%

FRONT END DTI LIMIT PER ANNUM

240000*0.28

=67200

THEREFORE

monthly spendon principal, interest, taxes and insurance

=67200/12

=$5600

jeff jeffy answered 2 years ago
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