Question
A couple found a house selling for 114,500. The taxes on the house are $1200 peryear, and insurance is $360 per year. They are requesting
A couple found a house selling for 114,500. The taxes on the house are $1200 peryear, and insurance is $360
per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a15% down payment and 3points, and the interest rate is10%. The couple's gross monthly income is $4750. They have more than 10 monthly payments remaining on acar, aboat, and furniture. The total monthly payments for these items is $430. Their bank will approve a loan that has a total monthly mortgage payment ofprincipal, interest, propertytaxes, andhomeowners' insurance that is less than or equal to28% of their adjusted monthly income. Complete parts a) through g) below.
a) Determine the required down payment.
The required down payment is $
nothing
.
b) Determine the cost of the 3 points.
The cost of the three points is $
nothing
. (Round to the nearest dollar asneeded.)
c) Determine 28
28% of their adjusted monthly income.
28
28% of their adjusted monthly income is $
nothing
. (Round to the nearest dollar asneeded.)
d) Determine the monthly payments of principal and interest for a20-year loan.
The monthly payment of principal and interest for a20-year loan is $
nothing
.
(Round to the nearest cent asneeded.)
e) Determine their total monthlypayment, includinghomeowners' insurance and taxes.
Their total monthlypayment, includinghomeowners' insurance and taxes is $
nothing
.
(Round to the nearest cent asneeded.)
f) Determine whether the couple will qualify for the20-year loan. Choose the correct answer below.
No
Yes
g) 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 $
nothing
.
(Round to the nearest cent asneeded.)
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