Rollin and Sandra want to buy a home priced at $265,000. They plan to finance this amount less the down payment
required. Rollin and Sandra have a combined annual income of $83,600 and have saved $53,000. They have a
recurring debt of $582. Use a 20% down payment and the 28/36 ratio to determine if Rollin and Sandra are eligible for
a loan. What would you advise them to do if they are not eligible?

Rollin and Sandra will not be eligible for a loan. Since 20% of $265,000 is $53,000, they have the required down payment.The recurring debt they have exceeds the allowable amount of $557. Rollin and Sandra should work on reducing their recurring debt.

Step-by-step explanation: this is what i put on the practice

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anthougo anthougo · Answer 2 · 2022-01-11T16:26:50+01:00

Based on the 28/36 rule, the Rollin and Sandra family are eligible for the mortgage loan of $212,000.

Data and Calculations:

Price of home = $265,000

Required down payment = 20% or $53,000

Amount saved = $53,000

Combined annual income of Rollin and Sandra = $83,600

Recurring debt = $582 per month

Annual recurring debt = $6,984 ($582 x 12)

The Rollin and Sandra family will need to finance $212,000 ($265,000 - $53,000) of the home price.

At 6% interest rate for 30 years, the Rollin and Sandra household will pay $1,271.05 monthly or $15,252.60 yearly. This gives a total annual debt payment of $22,236.60 ($6,984 + $15,252.60).

Thus, based on the 28/36 rule, the Rollin and Sandra family are eligible for the mortgage loan of $212,000.

Learn more about the 28/36 rule and eligibility for mortgage loan here: https://brainly.com/question/8409309