Chapter 7 group discussion.docx - Chapter 7 group discussion Discuss the Continuing Case Selecting and Financing Housing(Jamie Lee which can be found

Chapter 7 group discussion.docx - Chapter 7 group...

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Chapter 7 group discussion Discuss the Continuing Case: Selecting and Financing Housing (Jamie Lee) , which can be found near the end of Chapter 7. Answer questions 1, 2, 3, and 6 . For question 1 , just briefly list the advantages and disadvantages of renting v. buying. Even though the question refers to PFP, there is not the information for a quantitative analysis. For question 3 , outline your steps, following the Excel version of PFP sheet 24 (I think the book version had an issue not printing the full version of that spreadsheet). Note that you need to make the calculations and the borrower needs to qualify for both the front end ratio (all monthly house costs - mortgage principal (P) and interest (I) payment, property taxes (T), and property insurance (I) - referred to as PITI payments - can not exceed 28% of monthly income) and back end ratio (all monthly obligations - PITI plus other debt - can not exceed 36% of monthly income). Personal Financial Plan Worksheets.xls Research housing price/rent ratios:
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