Bill’s monthly income is $6,000. To meet the lender’s underwriting standards and qualify for the type of loan he wants, Bill’s housing expense to income ratio can’t exceed 28%. He can expect 15% of his monthly payment to go to property taxes and insurance. He’s planning to get a 30-year fixed-rate loan at the current market interest rate of 6%, and he’d like a loan with an 80% LTV. What is the maximum price he can pay for a house? Note: LTV means the loan to value ratio = loan amount $ / property values $. Also, assume that in the initial year (i.e., Year 1), a 100% loan payment is applied to the interest payment.