12. You are ready to buy a house, and you have $20,000 for a down payment and closing costs. Closing costs are estimated to be 4% of the loan value. You have an annual salary of $36,000, and the bank is willing to allow your monthly mortgage payment to be equal to 28% of your monthly income. The interest rate on the loan is 6% per year with monthly compounding (.5% per month) for a 30-year fixed rate loan. How much money will the bank loan you? How much can you offer for the house?
12. You are ready to buy a house, and you have $20,000 for a down payment and closing costs. Closing costs are estimated to be 4% of the loan value. You have an annual salary of $36,000, and the bank is willing to allow your monthly mortgage payment to be equal to 28% of your monthly income. The interest rate on the loan is 6% per year with monthly compounding (.5% per month) for a 30-year fixed rate loan. How much money will the bank loan you? How much can you offer for the house?
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 14P
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(Use Calulator or Formula Approach)
You are ready to buy a house, and you have $20,000 for a down payment and closing costs. Closing costs are estimated to be 4% of the loan value. You have an annual salary of $36,000 and the bank is willing to allow your monthly mortgage payment to be equal to 28% of your monthly income. The interest rate on the loan is 6% per year with monthly compounding (.5% per month) for a 30 year fixed rate loan. How much money will the bank loan you? How much can you offer for the house?
Transcribed Image Text:12. You are ready to buy a house, and you have $20,000 for a down payment and closing costs. Closing
costs are estimated to be 4% of the loan value. You have an annual salary of $36,000, and the bank is
willing to allow your monthly mortgage payment to be equal to 28% of your monthly income. The
interest rate on the loan is 6% per year with monthly compounding (.5% per month) for a 30-year fixed
rate loan. How much money will the bank loan you? How much can you offer for the house?
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