1. (6 Marks) Jim earns $6000 gross salary a month. He would like to purchase...
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1. (6 Marks) Jim earns $6000 gross salary a month. He would like to purchase a condominium. He has determined the following costs for the condominium: $200/month for property taxes, $300/month for condominium fees, and $200/month for heating. Based on his salary, these costs, and a GDS of 34% what is the maximum amount of money the bank will lend to him. The amortization period on the mortgage will be 25 years with monthly payments. The interest rate on the mortgage will be j2 = 2.5%. The stress test interest rate is j2 = 4.79%
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