Calculate debt limits

Question

Calculate the debt limit for the Mitchell family if their financial statement reads as follows:
total assets, including their home value of $380,000: $478,700
short-term liabilities: $6,700
long-term liabilities, including a mortgage balance of $298,000: $320,000

Answer 1

When discussing financial issues with a financial professional, please remember that terminology matters. "Debt" means one thing. "Debt limit" means another thing. If you're interested in "debt limit," well, for what purpose? If you're trying to get a loan, the bank will calculate your maximum debt load to see if you qualify for a loan by using their own predetermined debt limits. Unfortunately, I can't provide an answer because I don't have enough information.