1. What can I afford??
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2. What are the most significant monthly expenses
related to owning a home?
1. Mortgage
2. Property Taxes
3. Heating costs
2

3. Gross Debt Service Ratio
A general rule regarding how much of your
household income should go towards
household expenses.
Generally, house expenses should not
exceed 32% of your gross income.
3

4. Mortgage Payment + Property Taxes + Heating x 100 = 32%
Gross Income
***All amounts are monthly amounts
4

5. Jeric and Dearly have a gross monthly income of
$5680. Calculate their total affordable household
expenses.
$1817.60
5

6. If Jeric and Dearly will pay $173.00 in
property tax, and $217.00 in heating costs
what is their maximum allowable mortgage
payment?
$1427.60
6

7. If the best mortgage rate Jeric and Dearly
http://www.edu.gov.mb.ca/k12/assess/archives/cm_wt_rp_08.pdf
can get is 6.5%, for 25 years what is the
largest mortgage they can afford?
Use the chart in your resource book.
7

8. If Jeric and Dearly have a downpayment of
$30 000 to purchase their home what is
the maximum price they can afford?
8

9. Last assignment for this unit,
Assignment 6, ques. 1 ­ 5 Test will be Tuesday March 2
Aren't you happy you're not taking Pre­Cal
9