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: Cengage Learning
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Textbook Question
Chapter 5, Problem 6FPE
Calculating required down payment on home purchase. How much would you have to put down on a house with an appraised value of $105,000 when the lender required an 80 percent loan-to-value ratio?
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How much would you have to put down on a house costing $130,000 if the house had an appraised value of $135,000 and the lender required an 80% loan-to-value ratio? Ignore any closing costs.
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Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
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- You own a home that was recently appraised for $310,000. The balance on your existing mortgage is $115,350. If your bank is willing to loan up to 70% of the appraised value, what is the potential amount (in $) of credit available on a home equity loan? $_______arrow_forwardCalculate how much money a prospective homeowner would need for closing costs on a house that costs $237 comma 500237,500. Calculate based on a 2121 percent down payment, 1.21.2 discount points on the loan, a 0.60.6 point origination fee, and $1 comma 8301,830 in other fees.arrow_forwardA home is appraised at $330,000 and the buyer has negotiated a purchase price of $312,000. She hopes to mortgage $306,000. What is the loan-to-value ratio to the nearest percent? Is the lender likely to approve this mortgage without the buyer being required to purchase private mortgage insurance (PMI)? Loan-to-value ratio=?arrow_forward
- The Bainters want to estimate annual costs for purchasing the home so they can compare them with the costs they estimated for renting. These costs are expenses the Bainters will have only if they purchase instead of rent: monthly mortgage payment $200 per year for HOA fees $1,750 per year for property taxes $1,950 per year for home maintenance $75 per month for water and sewer services $10 per month for trash and recycling services $65 per month for internet $110 per month for homeowners' insurance Approximately how much should the Bainters budget for a year? Your answer should include the total amount the Bainters should budget the calculations or an explanation of how you determined the answerarrow_forwardYou buy a $255,000 home with a down payment of 26%. Find the amount of the down payment and the mortgage amount.arrow_forwardA 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?arrow_forward
- fill in the blanks using this information: Theoretical Housing Situation: Renting: Monthly Rent: $1,800 Renter’s Insurance: $200 per year Security Deposit: $2,000 After-tax Savings Rate: 5% Buying: Home Price: $250,000 Down Payment: $50,000 Loan Amount: $200,000 Loan Term: 25 years Interest Rate: 3.5% Property Taxes: 1.25% of the home price Homeowner’s Insurance: 0.4% of the home price Maintenance Costs: 1.5% of the home price Closing Costs: $5,000 After-tax Rate of Return: 4% Tax Rate: 25% Estimated Annual Appreciation: 2% Now, fill in the worksheet: A. COST OF RENTING: Annual Rental Costs (Line A.1): 12×$1,800=$21,60012×$1,800=$21,600 Renter’s Insurance (Line A.2): $200 Opportunity Cost of Security Deposit (Line A.3): $2,000×0.05=$100$2,000×0.05=$100 Total Cost of Renting (Line A.1 + Line A.2 + Line A.3): $21,600+$200+$100=$21,900$21,600+$200+$100=$21,900 B. COST OF BUYING: Annual Mortgage Payments (Line B.1): Use a mortgage calculator to find the monthly…arrow_forwardUse the following information to answer the questions. Price of home to purchase- $300,000 Rate- 2.8% (15 year) 3.2% (30 year) Down Payment- $65,000 What would be your monthly payment on a 15 year loan, assuming $2,400 property taxes and $2,400 home insurance?arrow_forwardYou buy a 267,000$ home with a down payment of 25%. Find the down payment and the mortgage amount. down payment=mortgage=arrow_forward
- fill out the worksheet using the following information: Theoretical Housing Situation: Renting: Monthly Rent: $1,800 Renter’s Insurance: $200 per year Security Deposit: $2,000 After-tax Savings Rate: 5% Buying: Home Price: $250,000 Down Payment: $50,000 Loan Amount: $200,000 Loan Term: 25 years Interest Rate: 3.5% Property Taxes: 1.25% of the home price Homeowner’s Insurance: 0.4% of the home price Maintenance Costs: 1.5% of the home price Closing Costs: $5,000 After-tax Rate of Return: 4% Tax Rate: 25% Estimated Annual Appreciation: 2%arrow_forwardThe cost to purchase the house the Bainters are considering is $195,000 but the Bainters plan to make a $40,000 down payment. The Bainters have been approved for a fixed-rate, 30-year mortgage with a 4.2% annual interest rate for the remaining costs. What is the correct equation to determine the monthly payments of the loan?arrow_forwardA savings and loan charges 2.075 points for a home buyer to obtain a loan of $255,000. To calculate the discount points, what value should be multiplied by the loan amount? Also, calculate the discount points.arrow_forward
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