Chase Bank has a policy of setting a 15% to 20% margin for error when giving out mortgage loans to first-time homeowners. The Dow family is eying its first home. Chase Bank conducted a Cash Flow analysis that reveals about 6.5 K of monthly disposable income and 3.5 K in monthly outflows. The bank further estimates that the Dow family may need another $500 per month in emergency funds.
How much can the Dow Family afford to borrow towards their first home if the APR on their 30-year Mortgage is 6%. Assume that the mortgage loan is signed on January 1st 2012 and paid at the end of each month


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