3. The benefits and costs of home ownership - Part 2 How Should the Costs of Purchasing and Owning a Home Be Categorized? You can categorize the costs associated with home ownership according to whether they are paid at closing, or monthly throughout the life of the mortgage loan, or even after the home is paid off. Consider the following situation, and then complete the form that follows by entering the necessary date, classifying the costs according to whether they represent up-front, monthly costs, or both, Finally, answer the associated questions that follow. Note: Round all dollar amounts to the nearest whole dollar, and if no poyment is necessary, record a zero (0) in the space, In case of deduction, enter the dollar amount without minus sign. When Should Melissa Pay Housing Costs? On Apoil 1 of next year, Melissa is purchasing a $150,000 house and has accepted the Tenth National Bank's offer of a ten-year $121,500 loan with an Interest rate of 9%. She has a gross annual income of $90,000 and is concerned about how much her one-time up-front costs and recurring monthly costs will be. She's recelved the following data and form, but she's not certain when she is to pay each cost-at closing, monthly, or both. Your task is to help Melissa by completing the form and classifying the costs. Mint: Remember that the purchase is expected to close on the first of April, This means the following: - Although a year's worth of a cost, such as the house's property taxes, may be owed by the home buyer, a portion of the tocal cost will. be paid by the seiler- - A portion of a cost, such as the homeomnar's insurance premium, may be deposited into an escrow occount so that the accumulated - Although a year's worth of a cost, such as the house's property taxes, may be owed by the home buyer, a portion of the total cost will be paid by the seller. - A portion of a cost, such as the homeowner's insurance premium, may be deposited into an escrow account so that the accumulated funds will be available to pay the entire annual premium when it is due next year. - For its mortgage, the bank will permit a 19% down payment but will also require 3 points. Mortgage insurance is required if the loanto-value (LTV) ratio is less than 20%. - A private mortgage insurance (PMI) policy, if necessary, is expected to cost $486 per year, but is distributed 12 times per year. - Melissa has purchased a home warranty policy, which carries an annual premium of $480 and is paid 12 times per year, and a homeowner's insurance policy, which costs $1,500 per year. Premiums for these two polides are paid to the respective insurance companies from an escrow account at the bank. - Credit report fee: $85 - Title search and deed recording fee: $300 - Loan origination fee: $900 - Title insurance policy-Lender: $375 - Mortgage payment (principal and interest): $1,539 - Appraisal and survey fees: $600 - Attorney fees: $750 - Home, termite, and radon Inspections: $575 - Title insurance policy-Homeowner: $450 - Messenger and document fees: $315 - Property taxes on the house: $7,500 per year - The property taxes and homeowner's policy should be pro-rated. Using the given information, what is the loan-to-value (LTV) ratio required by the Tenth National Bank? 123.46%81.00%19.00% Melissa's total closing costs are of her mortgage, and her monthly costs are of monthly income. 3. The benefits and costs of home ownership - Part 2 How Should the Costs of Purchasing and Owning a Home Be Categorized? You can categorize the costs associated with home ownership according to whether they are paid at closing, or monthly throughout the life of the mortgage loan, or even after the home is paid off. Consider the following situation, and then complete the form that follows by entering the necessary date, classifying the costs according to whether they represent up-front, monthly costs, or both, Finally, answer the associated questions that follow. Note: Round all dollar amounts to the nearest whole dollar, and if no poyment is necessary, record a zero (0) in the space, In case of deduction, enter the dollar amount without minus sign. When Should Melissa Pay Housing Costs? On Apoil 1 of next year, Melissa is purchasing a $150,000 house and has accepted the Tenth National Bank's offer of a ten-year $121,500 loan with an Interest rate of 9%. She has a gross annual income of $90,000 and is concerned about how much her one-time up-front costs and recurring monthly costs will be. She's recelved the following data and form, but she's not certain when she is to pay each cost-at closing, monthly, or both. Your task is to help Melissa by completing the form and classifying the costs. Mint: Remember that the purchase is expected to close on the first of April, This means the following: - Although a year's worth of a cost, such as the house's property taxes, may be owed by the home buyer, a portion of the tocal cost will. be paid by the seiler- - A portion of a cost, such as the homeomnar's insurance premium, may be deposited into an escrow occount so that the accumulated - Although a year's worth of a cost, such as the house's property taxes, may be owed by the home buyer, a portion of the total cost will be paid by the seller. - A portion of a cost, such as the homeowner's insurance premium, may be deposited into an escrow account so that the accumulated funds will be available to pay the entire annual premium when it is due next year. - For its mortgage, the bank will permit a 19% down payment but will also require 3 points. Mortgage insurance is required if the loanto-value (LTV) ratio is less than 20%. - A private mortgage insurance (PMI) policy, if necessary, is expected to cost $486 per year, but is distributed 12 times per year. - Melissa has purchased a home warranty policy, which carries an annual premium of $480 and is paid 12 times per year, and a homeowner's insurance policy, which costs $1,500 per year. Premiums for these two polides are paid to the respective insurance companies from an escrow account at the bank. - Credit report fee: $85 - Title search and deed recording fee: $300 - Loan origination fee: $900 - Title insurance policy-Lender: $375 - Mortgage payment (principal and interest): $1,539 - Appraisal and survey fees: $600 - Attorney fees: $750 - Home, termite, and radon Inspections: $575 - Title insurance policy-Homeowner: $450 - Messenger and document fees: $315 - Property taxes on the house: $7,500 per year - The property taxes and homeowner's policy should be pro-rated. Using the given information, what is the loan-to-value (LTV) ratio required by the Tenth National Bank? 123.46%81.00%19.00% Melissa's total closing costs are of her mortgage, and her monthly costs are of monthly income