d Sakura have now saved up their down payment to buy a home, but they still need to borrow to cover the rest. For the home they want this will require a mortgage of $450,000 to cover the remaining amount and they’re not sure whether they could afford the monthly loan payments. The bank has offered them a mortgage interest rate of 3.25%, compounded monthly . What if Aya and Sakura could only afford a monthly payment of $1800? What would be the maximum mortgage amount they could afford to borrow from the bank, if all the other conditions were the same? What is the total amount that would be paid to the lender over 25 y

d Sakura have now saved up their down payment to buy a home, but they still need to borrow to cover the rest. For the home they want this will require a mortgage of $450,000 to cover the remaining amount and they’re not sure whether they could afford the monthly loan payments. The bank has offered them a mortgage interest rate of 3.25%, compounded monthly . What if Aya and Sakura could only afford a monthly payment of $1800? What would be the maximum mortgage amount they could afford to borrow from the bank, if all the other conditions were the same? What is the total amount that would be paid to the lender over 25 y

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter7: Credit Cards And Consumer Loans

Section: Chapter Questions

Problem 1FPC

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Aya and Sakura have now saved up their down payment to buy a home, but they still need to borrow to cover the rest. For the home they want this will require a mortgage of $450,000 to cover the remaining amount and they’re not sure whether they could afford the monthly loan payments. The bank has offered them a mortgage interest rate of 3.25%, compounded monthly . How much would they have to be able to afford to pay each month in order to pay off their mortgage in 25 years? [1] What is the total amount that would be paid to the lender after 25 years of payments?
Mateo and Klaus have now saved up their down payment to buy a home, but they still need to borrow to cover the rest. For the home they want this will require a mortgage of $585,000 to cover the remaining amount and they're not sure whether they could afford the monthly loan payments. The bank has offered them a mortgage interest rate of 5.15%, compounded semi-annually. How much would they have to be able to afford to pay each month in order to pay off their mortgage in 25 years? [Blank-1]What is the total amount of interest that would be paid to the lender after 25 years of payments? [Blank-2]What if Mateo and Klaus could only afford a monthly payment of $2,500? What would be the maximum mortgage amount they could afford to borrow from the bank, if all the other conditions were the same? [Blank-1]What is the total amount of interest that would be paid to the lender over 25 years? [Blank-2]
Enrico Suarez has decided to purchase a house instead of renting an apartment. He can afford a monthly payment of $800, and he has saved $6,000 to use as a down payment on a house. If the mortgage is 4% nominal interest (compounded monthly) on a 30-year loan, how much can Enrico afford to spend on a house?
Karen and Wayne need to buy a refrigerator because theirs just broke. Unfortunately, their savings account is depleted, and they will need to borrow money in order to buy a new one. Sears offers them an installment loan at 14% (add-on rate). If the refrigerator at Sears costs $1,578 plus 5% sales tax, and Karen and Wayne plan to pay for the refrigerator for 3 years, what is the monthly payment? (Round your answer to the nearest cent.)
The Potters want to buy a small cottage costing $120,000 with annual insurance and taxes of $740 and $2200, respectively. They have saved $15,000 for a down payment, and they can get a 6%, 25-year mortgage from a bank. They are qualified for a home loan as long as the total monthly payment does not exceed $1000. Are they qualified? What is the total monthly payment?
The MacEacherns wish to buy a new house that costs $279,000. The bank charges 5.25% interest. A) If the MacEacherns take out a 20-year mortgage, what will their monthly payment be? B) How much total interest will the MacEacherns pay if they only paid the minimum monthly payment found int part A and paid for the entire 20 years? C) If the home insurance premium for the year will be $1,224 and they will need to pay an annual property tax amount of $2,136, what is the PITI? D) What is the finance charge for the first payment? E) How much of the first monthly payment will go toward the balance/principal? F) What is the new balance on the loan?
Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
Bonnie and Claude want to buy a house. They can afford monthly payments of $1125.00. The bank offers them a mortgage at an interest rate of 3.10%, compounded semi-annually, with an amortization period of 25 years. a) What is the maximum amount of money the bank will lend them for their mortgage? Show your work. b) If they have $30,000 saved for a down payment, what is the maximum house price they can afford?
The McBertys have "$20, 000" in savings to use as a down payment on a new home. They also have determined that they can afford between "$1, 600 and $1,900" per month for mortgage payments. If the mortgage rates are 11% per year compounded monthly, what is the price range for houses they should consider for a 30 - year loan?
Felipe and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment. Calculate the monthly payments, assuming they get 5%, 30-year mortgage.
A young couple decide to take advantage the current first-time home buyer credit and buy a new house. With their combined income, they can afford to make a maximum of $550 monthly payment. With their credit history, they can borrow a 30-year fixed rate mortgage loan at 6.0% (mortgage loans compound monthly). What's the maximum amount they can borrow?
The Jeffersons are considering selling their current residence, buying a small home near Avery’s parents for $220,000 with a $100,000 30-year mortgage at 3.5%, and investing the net proceeds in their retirement accounts and education accounts. They assume they will incur 2% in transaction costs for the purchase and 6% for the sale. They have asked you the following: What will their monthly payment (principal and interest only) be on their new home if their new mortgage is the 3.5% on $100,000 for 30 years that they project? How much cash would they have available for other goals if they sell their old house for $330,000 and buy a new house for $220,000? Assume the mortgage they pay off is $56,000 and they pay the transaction costs for both homes from the proceeds of the sale of their current home. Also assume they take a $100,000 mortgage on the new home. If the Jeffersons purchase the new house and start a $100,000 30-year mortgage at 3.5% one year from today, what will be the…