Sean and Lisa (age 25 and 28, respectively) are purchasing their first home for

Question

Sean and Lisa (age 25 and 28, respectively) are purchasing their first home for $200,000 with a 5% down payment. They will withdraw the down payment from Lisa's IRA. They will have to pay ____ on the IRA withdrawal.
a. federal income taxes b. an early withdrawal penalty c. Social Security taxes d. a and b e. a, b, and c

____ 14. Pete and Pam want to purchase a new home but don't know how much mortgage they can qualify for. The lender requires total installment loan payments not exceed 32% of gross monthly income. Based on Pete and Pam's financial data below, what is the maximum monthly mortgage payment for which they can qualify?

Monthly Gross Income $5,000
Car payment 400
Student loan payment 300
Current rent payment 1,000

Explanation / Answer

b. an early withdrawal penalty maximum monthly mortgage payment for which they can qualify= 32%*$5,000 = $1600

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