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Lesson 5: Can You Afford the House You Want?

Lesson 5: Can You Afford the House You Want?. Use the “Gross Debt Service Ratio” aka GDS formula. Your calculation must be less than 32% to be able to afford the house. If your answer is greater than 32%, you can not buy the house!. Answers to assignment:. 2.

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Lesson 5: Can You Afford the House You Want?

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  1. Lesson 5: Can You Afford the House You Want? Use the “Gross Debt Service Ratio” aka GDS formula. Your calculation must be less than 32% to be able to afford the house. If your answer is greater than 32%, you cannot buy the house!

  2. Answers to assignment: 2. a) 19%Yes they could afford this house. b) 42%No c) 30% Yes (Note: Change annual amounts to monthly to use in formula.) 3. Note: mortgage payment = $435.12 27%Yes

  3. Part II: What is the Most Expensive House You Can Afford? • Fill out the chart to see how much you can spend on a house. • Answers: 1) $ 153,344.52 2) $ 78,081.97 3) $ 79,685.45

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