After obtaining a job in your chosen profession, you have decided to purchase a house that

is on the market for You are purchasing a house valued at $$260,000$ townhouse, which is a

near the lower end of the housing market in terms of price. The bank is offering you a FHA

Loan with a $30-$year mortgage with an interest rate of $6\mathrm{.}663\%,$ no down payment required.

$2.)$ Determine the monthly payment amount $-$ this will include escrow for

taxes and insurance. The tax rate is $0\mathrm{.}42\%.$ $$1294$ is the average yearly

amount for homeowners insurance.

$3.)$ Find the total amount paid on the house with no down payment $($exclude

the escrow amount and assume the house is not being paid off early$).$

Your answer

$4.)$ Find the amount of total interest paid on the house.

$5.)$ Although you have already decided to buy the house, calculate how long it

would have taken you to save a $$10,000$ down payment for your house if you

could invest $2\%$ of your monthly net income into an account that earned $4\%$

quarterly. Round your answer to $2$ decimal places.

Your answer

$6.)$ Calculate a new monthly payment for a $30-$year fixed mortgage with the

$$10,000$ down payment. Use the same information as the original loan.

Your answer

$7.)$ How much interest would have been saved with the down payment?

$1$ point

Your answer

$8.)$ Economic experts recommend spending no more than $30\%$ of gross

monthly income $($before taxes$)$ on housing. Can you afford to live in the

house you bought? Justify your answer.