Question
Calculate Seyed's monthly PITI payment. To calculate principal and interest (PI) assume he has purchased a home for $140,000 and has a $112,000, 30-year, 4.735
Calculate Seyed's monthly PITI payment. To calculate principal and interest (PI) assume he has purchased a home for $140,000 and has a $112,000, 30-year, 4.735 percent fixed-rate mortgage. To calculate his local real estate taxes (T) use the real estate rate as given in the case, assuming the property has an assessed value of $128,000. Also include Seyed's projected homeowner's insurance (I) cost as given in the case. Assuming he has purchased a home for
$140,000 and has a $112,000, 30-year, 4.735 percent fixed-rate mortgage, the amount Seyed would pay in principal and interest each month is
$. (Round to the nearest cent.)
The amount Seyed would pay in taxes each month is
$(Round to the nearest cent.)
The amount Seyed would pay in insurance each month is
$(Round to the nearest cent.)
Seyed's projected monthly PITI payment would be
$(Round to the nearest cent.)
e. Determine if Seyed should buy or continue renting. To purchase the house considered in part (d), Seyed would pay $6,000 in closing costs including $2,800 in discount points. Consider a 1- and 7-year time horizon. (Hint:Use Worksheet for Rent-Versus-Buy decision.)
The total monthly rent costs for 1 year is
$(Round to the nearest dollar.)
The total renter's insurance for 1 year is
$(Round to the nearest dollar.)
The after-tax opportunity cost of interest lost because of having to maintain a security deposit for 1 year is
$(Round to the nearest dollar.)
The total cost of renting for 1 year is
$(Round to the nearest dollar.)
The total monthly rent costs for 7 years is
$(Round to the nearest dollar.)
The total renter's insurance for 7 years is
$(Round to the nearest dollar.)
The after-tax opportunity cost of interest lost because of having to maintain a security deposit for 7 years is
$(Round to the nearest dollar.)
The total cost of renting for 7 years is
$(Round to the nearest dollar.)
The total of the mortgage payments for 1 year is
$(Round to the nearest dollar.)
The total property taxes for 1 year is
$(Round to the nearest dollar.)
The total homeowner's insurance for 1 year is
$(Round to the nearest dollar.)
The total of the additional operating costs for 1 year is
$(Round to the nearest dollar.)
The after-tax opportunity cost of interest lost because of having to maintain a down payment for 1 year is
$(Round to the nearest dollar.)
The total closing costs, including points, is
$(Round to the nearest dollar.)
If the mortgage balance after 1 year is $110,267, the total of the mortgage payments going toward the loan principal for 1 year is
$.
(Round to the nearest dollar.)
The estimated appreciation in value of the home, less the sales commission at the end of the period is
$(Round to the nearest dollar.)
The total cost of buying a home, for those who do not itemize, after 1 year is
$(Round to the nearest dollar.)
The tax savings from the tax-deductibility of the interest portion of the mortgage payments for 1 year is
$(Round to the nearest dollar.)
The tax savings from the tax-deductibility of the property taxes on the new house for 1 year is
$(Round to the nearest dollar.)
The tax savings from the tax-deductibility of the points portion of the closing costs for 1 year is
$(Round to the nearest dollar.)
The total cost of buying a home, to homebuyers who itemize, after 1 year is
$(Round to the nearest dollar.)
The advantage of buying a house, to those who do not itemize, after 1 year is
$(Round to the nearest dollar.)
The advantage of buying a house, to those who do itemize, after 1 year is
$(Round to the nearest dollar.)
The total of the mortgage payments for 7 years is
$(Round to the nearest dollar.)
The total property taxes for 7 years is
$(Round to the nearest dollar.)
The total homeowner's insurance for 7 years is
$(Round to the nearest dollar.)
The total of the additional operating costs for 7 years is
$(Round to the nearest dollar.)
The after-tax opportunity cost of interest lost because of having to make a down payment for 7 years is
$(Round to the nearest dollar.)
The total closing costs, including points, is
$(Round to the nearest dollar.)
If the mortgage balance after 1 year is $97,960, the total of the mortgage payments going toward the loan principal for 7 years is
$(Round to the nearest dollar.)
The estimated appreciation in value of the home, less the sales commission at the end of the period is
$(Round to the nearest dollar.)
The total cost of buying a home, for those who do not itemize, after 7 years is
$(Round to the nearest dollar.)
The tax savings from the tax-deductibility of the interest portion of the mortgage payments for 7 years is
$(Round to the nearest dollar.)
The tax savings from the tax-deductibility of the property taxes on the new house for 7 years is
$(Round to the nearest dollar.)
The tax savings from the tax-deductibility of the points portion of the closing costs for 7 years is
$(Round to the nearest dollar.)
The total cost of buying a home, to homebuyers who itemize, after 7 years is
$(Round to the nearest dollar.)
The advantage of buying a house, to those who do not itemize, after 7 years is
$(Round to the nearest dollar.)
The advantage of buying a house, to those who do itemize, after 7 years is
$(Round to the nearest dollar.)
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