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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Chapter 6, Problem 12FPE
Summary Introduction
To discuss: The steps to be taken by Person C to improve the FICO score.
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Can Olivia and Anthony Afford This Home Using the Monthly Income Loan Criterion?
Next week, your friends Olivia and Anthony want to apply to the Fourth Global Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $125,000. Given your knowledge of personal finance, they’ve asked for your help in completing the Home Affordability Worksheet that follows. (Note: When completing the form, round each dollar amount to the nearest whole dollar.)
To assist in the preparation of the worksheet, Olivia and Anthony also collected the following information:
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Their financial records report a combined gross before-tax annual income of $125,000 and current (premortgage) installment loan, credit card, and car loan debt of $1,823 per month.
•
Their property taxes and homeowner’s insurance policy are expected to cost $3,125 per year.
•
Their best estimate of the interest rate on their mortgage is 7.5%, and they are interested in obtaining a 15-year loan.…
Tom and Kyra Courtney are considering buying a house and are researching the potential costs. Their adjusted gross income is $144,000. The monthly mortgage payment for the house they want would be $1,450. The annual property taxes would be $9,400, and the homeowner’s insurance premium would cost them $876 per year. What is the front end ratio and will they be able to qualify?
Ronald and Samantha Brady recently had their condominium in Port Isaac appraised for $323,600. The balance on their existing first mortgage is $154,720. If their bank is willing to loan up to 75% of the appraised value, what is the amount (in $) of credit available to the Bradys on a home equity line of credit?
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Chapter 6 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
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Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
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ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning