Answer:
$970 (limited by the back-end ratio)
Step-by-step explanation:
The front-end ratio limits housing-related expenses to ...
28% × $62,000 = $17,360
per year. So the amount that can be spent on mortgage debt is ...
$17,360 -3600 -360 = $13,400 . . . per year
___
The back-end ratio limits the total of all debt to ...
36% × $62,000 = $22,320
Subtracting payments already being made, we find the allowable additional annual debt to be ...
$22,320 -12·(335 +225) -3600 -360 = $11,640
This is a lower limit than that required by the front-end ratio. It limits the monthly house payment to ...
$11,640/12 = $970
