James, 35 years old, would like to save as much money as possible for the down- payment of a house which he would like to purchase in 3-years. Currently he rents an apartment for $4,000. per month, is unmarried with additional monthly expenses totaling $6000. This includes a car loan with monthly payments of $1,500. His income per month is $15,000. He prefers a condominium but is open to other options. The price range for a condo he's interested in is $2,000,000. to $2,500,000. a. What is the minimum amount of money James should save for the down payment of the condominium should he decide to take out a mortgage? b. Advise James on the best option to save for the down-payment of the condominium. c. Discuss four (4) factors James should consider before purchasing a house. d. Calculate James debt-to-service ratio. Comment on the results.
James, 35 years old, would like to save as much money as possible for the down- payment of a house which he would like to purchase in 3-years. Currently he rents an apartment for $4,000. per month, is unmarried with additional monthly expenses totaling $6000. This includes a car loan with monthly payments of $1,500. His income per month is $15,000. He prefers a condominium but is open to other options. The price range for a condo he's interested in is $2,000,000. to $2,500,000. a. What is the minimum amount of money James should save for the down payment of the condominium should he decide to take out a mortgage? b. Advise James on the best option to save for the down-payment of the condominium. c. Discuss four (4) factors James should consider before purchasing a house. d. Calculate James debt-to-service ratio. Comment on the results.
Chapter9: Obtaining Affordable Housing
Section: Chapter Questions
Problem 1DTM
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Transcribed Image Text:James, 35 years old, would like to save as
much money as possible for the down-
payment of a house which he would like to
purchase in 3-years. Currently he rents an
apartment for $4,000. per month, is
unmarried with additional monthly expenses
totaling $6000. This includes a car loan with
monthly payments of $1,500. His income per
month is $15,000. He prefers a condominium
but is open to other options. The price range
for a condo he's interested in is $2,000,000.
to $2,500,000.
a. What is the minimum amount of money
James should save for the down payment of
the condominium should he decide to take
out a mortgage?
b. Advise James on the best option to save for
the down-payment of the condominium.
c. Discuss four (4) factors James should
consider before purchasing a house.
d. Calculate James debt-to-service ratio.
Comment on the results.
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