Your sister is considering the
purchase of a home rather than renewing the lease on her two-bedroom
apartment. She is currently paying $850
per month for rent. She has asked you to
help her decide what sort of home she might be able to afford for the $850 per
month. Her bank offers first-time home
buyers (with good credit) a 30-year mortgage at a fixed rate of 5.49%. If the cost of insurance and property taxes
is about $175 per month in the neighborhood where she’d like to live.