Mr. and Mrs. Bogdanovich want to buy a house that costs $585,000. They can only afford to pay $2200 per month for their mortgage payment, but they have cash on hand for a good down-payment. If they can get a 3.25%, 30-year mortgage, how much should they put down to keep their mortgage payments at $2,200? N= FV= I%= P/Y= PV= C/Y= PMT= End or Begin They can afford to finance ____________________________. So, they need to make a down payment of _________?______________.

Mr. and Mrs. Bogdanovich want to buy a house that costs $585,000. They can only afford to pay $2200 per month for their mortgage payment, but they have cash on hand for a good down-payment. If they can get a 3.25%, 30-year mortgage, how much should they put down to keep their mortgage payments at $2,200? N= FV= I%= P/Y= PV= C/Y= PMT= End or Begin They can afford to finance ________________________. So, they need to make a down payment of _?__________.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter6: Using Credit

Section: Chapter Questions

Problem 5FPE: Home equity lines. Kai and Ivy Harris have a home with an appraised value of $180,000 and a mortgage...

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Home equity lines. Kai and Ivy Harris have a home with an appraised value of $180,000 and a mortgage balance of only $90,000. Given that an S&L is willing to lend money at a loan-to-value ratio of 75 percent, how big a home equity credit line can Kai and Ivy obtain? How much, if any, of this line would qualify as tax-deductible interest if their house originally cost $200,000?
A family wishes to buy a $235,900 home. - If a conventional lender is willing to loan the family 87% of the price of the home, what will the loan amount be? What will be the down payment with the loan? - If the family decides to obtain an FHA loan instead, what will the minimum down payment be? (FHA loan down payments are 3.5% of the first $25,000 and 5.2% of the balance of the loan). What is the maximum FHA loan the family can obtain?
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?
Manuel and Aponi want to buy a $221,000 home. They plan to pay 20% as a down payment, and take out a 30 year loan at 3.85% interest for the balance.a) How much is the loan amount going to be?b) What will the monthly payment be for Manuel and Aponi?c) How much of the first payment is interest?d) What is the total of the payments?e) How much interest was paid?
George and Barbara want to buy a house, they have combined incomes of $150,000 annually. Property taxes on their new home will be about $3,600 annually and homeowner’s insurance will be about $1,800. What is the maximum mortgage payment they can afford if their lender requires a front-end ratio of 28%?
A family wants to purchase a house that costs $135,000. They plan to take out a $125,000 mortgage on the house and put $10,000 as a down payment. The bank informs them that with a 15-year mortgage their monthly payment would be $718.77 and with a 30-year mortgage their monthly payment would be $582.86. Determine the amount they would save on the cost of the house if they selected the 15-year mortgage rather than the 30-year mortgage. **** How much would they save if they selected the 15-year mortgage?
The Thiesens are purchasing a $240,000 home with a 30-year fixed mortgage at an APR of 4.5%. They made a 10% down payment. Their monthly payment for principal and interest is ??? and the total interest they will pay is ???Since the Theisen's did not put 20% down, they have to pay PMI of 0.68%. How much will they pay each month in mortgage insurance?
Mr. and Mrs. MBA are planning to purchase a $200,000 house and have $40,000 as a down payment towards their purchase. The MBAs are considering two 30-year home mortgage loan options. The first option is 6.25% APR financing with no points. The second option is 5.9% APR financing that requires 1.5% (or 1.5 points) of the loan amount be paid up front in order to secure this lower finance rate for the entire needed loan amount (That is, you can think of 1.5 points is an additional fee to enjoy lower interest rate and this up-front fee should not be included in the loan amount.) Answer the following: A. What is the MBAs monthly payment for each loan? B. Ignoring the time value of money, how many months would the MBAs have to stay in their house to break even on the points they would pay on the second loan option vs. the no-point first loan option?
Charlie needs a $275,000 mortgage and he'd like to pay it off in 30 years. He is considering two banks. Bank A: 3.5% with monthly payments of $1234.87 Bank B: 4% with monthly payments of $1312.89 Charlie doesn't think a 0.5% difference is that much. What is the amount of loan A and the amount of loan B, with total interest paid over the life of the loan?
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?
Donald and Alex have a combined gross monthly income of $5500. They want to buy a house in a neighborhood where the average monthly heating cost is $200 and monthly property taxes are $325. a) Calculate the maximum monthly mortgage payment they can afford, based on the gross debt service ratio. Show your work. b) Based on the maximum monthly mortgage payment in a), their bank has offered them a 25 year mortgage at an interest rate of 3.5%, compounded semi-annually. If they saved $20,000 for a down payment, what would be the maximum house price they can afford? Show your work.
A couple wants to purchase a $170,000 house, and they have enough saved for a 5% down payment and money for other closing costs. The bank is offering a 30-year mortgage at 5.35% interest, compounded monthly. The couple has an annual after-tax income of $85,000 and other debts totaling $850 per month. Because their down payment is less than 20%, they are required to pay for private mortgage insurance, which costs 1% of the loan amount each year.(a) If the maximum debt-to-income ratio (total monthly debt divided by after-tax monthly income) is 43%, can the couple afford to purchase the home? (b) If the couple lives in the house for 30 years, what is the total amount paid for the house, including down payment, principal, interest, and private mortgage insurance?