Determine the maximum amount the couple has for a down payment. Use this to calculate the cost of a potential house if the down payment is 20% down or 10% down.
Their financial considerations:
Tim’s (new) yearly gross income: $75,000
Kim’s yearly gross income: $22,000
Combined monthly college loan payments: $220 (will be paid off in 10 years)
Monthly car payments: $375 (will be paid off in 16 months)
Credit Card 1: $170 per month (will be paid off in 5 months)
Credit Card 2: No outstanding balance (they pay the current balance each month)
Amount in Savings Account: $9,525 (they’d like to keep at least $2000 cushion for unexpected costs)