A couple found a house selling for $115.500. The taxes on the house are $1400 per year, and insurance is $360 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 15% down payment and 3 points, and the interest rate is 10%. The couple's gross monthly income is $4750 They have more than 10 monthly payments remaining on a car, a boat, and furniture. The total monthly payments for these items is $430 Their bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners' insurance that is less than or equal to 28% of their adjusted monthly income. Complete parts a) through g) below a) Determine the required down payment The required down payment is S

A couple found a house selling for $115.500. The taxes on the house are $1400 per year, and insurance is $360 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 15% down payment and 3 points, and the interest rate is 10%. The couple's gross monthly income is $4750 They have more than 10 monthly payments remaining on a car, a boat, and furniture. The total monthly payments for these items is $430 Their bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners' insurance that is less than or equal to 28% of their adjusted monthly income. Complete parts a) through g) below a) Determine the required down payment The required down payment is S

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A couple found a house selling for $115,500.The taxes on the house are $1200 per year, and insurance is $360 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 15% down payment and 3 points, and the interest rate is 10%. The couple's gross monthly income is $4850. They have more than 10 monthly payments remaining on a car, a boat, and furniture. The total monthly payments for these items is $420. Their bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners' insurance that is less than or equal to 28% of their adjusted monthly income. Complete parts a) through g) below. Part 1 a) Determine the required down payment. The required down payment is $?
A couple found a house selling for $114,500. The taxes on the house are $1300 per year, and insurance is $340 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 15% down payment and 3 points, and the interest rate is 10%. The couple's gross monthly income is $4750. They have more than 10 monthly payments remaining on a car, a boat, and furniture. The total monthly payments for these items is $420. Their bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners' insurance that is less than or equal to 28% of their adjusted monthly income. Determine how much of the first payment on the loan is applied to the principal. The amount of the first payment that is applied to the principal is: (Round to the nearest cent as needed.)
A couple found a house selling for $113,500. The taxes on the house are $1400 per year, and insuarnce is $320 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 1570 down payment and 3 points, and the interest rate is 10%. The couple's gross monthly income is Ş4750. They nave more than 10 monthly payments on a car, a boat, and furniture. The total monthly payments for these items is $430. Their bank will approve a loan that has a total monthly mortgage payment of principal, Interest, property taxes, and homeowners' insurance that is less than or equal to 28% of their adjusted monthly income. a.) Determine the required down payment. b.) Determine the cost of 3 points c.) Determine 28% of their adjusted monthly income. d.) Determine the montly payments of principal and interest for a 20-year loan. e.) Determine their total monthly payment, including homeowners' insuarance and taxes. f.) Determine whether the couple will qualify for…
John and Marsha are buying their first home. It has three bedrooms, two baths, and a two car garage. The total cost is $266,500. They have $35,000 for the down payments. They can finance the difference through their local credit union with a 30 year loan at 3.95%. What will their monthly payment be?
Taibi Hafid is considering the purchase of a used car. The price, including the title and taxes, is $10,500. Taibi is able to make a $2,500 down payment. The balance, $8,000, will be borrowed from his credit union at an interest rate of 10% compounded daily. The loan should be paid in 48 equal monthly payments. Compute the monthly payment. What is the total amount of interest Taibi has to pay over the life of the loan?
Kathy wants to buy a condominium selling for $95,000. The taxes on the property are$1500 per year, and homeowners' insurance is $336 per year. Kathy's gross monthly income is$4000. She has 15 monthly payments of $135 remaining on her van. The bank is requiring 20% down and is charging a 9.5% interest rate with no points. Her bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners' insurance that is less than or equal to 28% of her adjusted monthly income. (a) Determine the required down payment. (b) Determine 28% of her adjusted monthly income. (c) Determine the monthly payment of principal and interest for a 25-year loan. (d) Determine her total monthly payment, including homeowners' insurance and taxes. (e) Does Kathy qualify for the loan? (f) Determine how much of the first payment on the mortgage is applied to the principal. (g) Determine the total amount she pays for the condominium with a 25-year conventional loan.…
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?
Rafaela has a gross monthly income of $3,900. She has 15 remaining payments of $189 on a used car. The taxes and insurance on a house Rafaela may purchase are $115 per month. What maximum monthly payment does the bank's loan officer feel that Rafaela can afford? The maximum monthly payment includes principal and interest for the amount of the loan as well as the taxes and insurance. Round your answer to the nearest cent.
Rose, recently purchased a new automobile for $25,000. She made a $5,000 down payment and financed the balance over 48 months using a loan with a 12 percent annual nominal rate of interest. What are her monthly payments?
The Carp family makes a $30,000 down payment on a $150,000 home. They finance it for 15 years at 3 7/8%. If annual taxes are $2,970 and homeowners insurance is $940, what will their total PITI payment be? If the bank charges 2 discount points, how much will the Carp family pay for them? Referring to question #15, if the Carp's have a gross monthly income of $5,600 and total fixed monthly expenses of $2,720, which includes their house payment, calculate the housing ratio and the debt to income ratio. Do they qualify?
Jose and Rosa are looking for a condo. Their combined gross annual income is $61,000. The best mortgage rate offered by their bank is a 3.12 percent, five-year fixed rate compounded semi-annually with a 20-year amortization. The annual property taxes are estimated at $1,360, and the annual heating costs are $1,340. Their personal debt consumption is $500 per month. Condo fees are estimated at $700 per month. The bank's guideline for TDS is 30 percent. Based on this information, what is the maximum monthly mortgage payment they could afford? The maximum monthly mortgage payment they could afford is $ (Round to the nearest cent.)
Kayla Thompson is married and currently rents an apartment for $650 per month and paying $375 annually for renter's insurance. Her landlord required a $1,000 security deposit on the apartment. She just found a small townhouse she can buy for $285,000. She has enough cash for a $10,000 down payment and $4,100 in closing costs. Her bank is offering 30-year mortgages at a 6 percent annual rate. Kayla estimated the following costs as a percentage of the home's price: property taxes, 2.5 percent; homeowner's insurance, 0.5 percent; and maintenance, 0.7 percent. She is in the 25 percent tax bracket, has an after-tax rate of return on invested funds of 4 percent, and expects the townhouse to appreciate 3 percent per year. Using Worksheet 5.2, calculate the cost of each alternative and recommend the least costly option - rent or buy - for Kayla. Assume that Kayla uses the standard deduction of $24,000. Round the answers to the nearest dollar. Cost of renting: $ Cost of buying: $ Kayla…

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