A growing family wishes to move to a larger house and the spotted one which they like. they have saved up and can make a down payment of $18000. John the husband,works full time with a gross monthy income of $3000 and the wife Junita works part time for a gross monthly income of $1200. The bank loan officer calculates a gross debt service ratip of 24.7%. Is this house purchase avisable? Are there other factors which could affect the avisability?
You don't say what the purchase price is. But the maximum amount to be financed (price less $18K) must be less than
(3000+1200)/.247 = 17004
I'm sure you can think of other factors that might affect things positively or negatively.