Mr. and Mrs. Smith are considering the purchase of a house. They can budget a mortgage payment (P&I) of $1,400 per month.
(a) If the current mortgage rate is 4.25% for a 30 year mortgage and they make a down payment of 20% of the purhcase price, can they buy a house costing $300,000?
(B) What is the maximum amount they can borrow?