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5. Maria and Juan Gonzales have up to $17,000 dollars to put down on a house they can get a loan get an FHA loan
5. Maria and Juan Gonzales have up to $17,000 dollars to put down on a house they can get a loan get an FHA loan for 3.5% down and an interest rate of 5.5% and they must pay FHA mortgage insurance or a loan for 10% down and a 4.75% interest rate and they must pay private mortgage insurance. Their current income is $70,000 and the bank requires the loan payments to be no more than 25% of their income. How much home can they afford with each loan? Which loan do you think they should choose and why?
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