Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Estimate the affordable monthly mortgage payment the affordable mortgage amount, and the affordable home purchase price for the following situation. Use Exh bit7-6. Exhibit.7.7. (Round

image text in transcribed
image text in transcribed
image text in transcribed
Estimate the affordable monthly mortgage payment the affordable mortgage amount, and the affordable home purchase price for the following situation. Use Exh bit7-6. Exhibit.7.7. (Round your intermediate and final answers to the nearest whole doliar.) Exhibit 7-7 Mortgage Payment Factors (principal and interest factors per $1,000 of loan amount) Exhibit 7-6 Housing Affordability and Mortgage Qualification Amount \begin{tabular}{|c|c|c|} \hline & Example A & Example B \\ \hline Step 1: Determine your monthly gross income (annual income divided by 12). & $48,00012 & $48.00012 \\ \hline Step2Withadownpaymentofatleast5percent,lendersuse33percentofmonthlygrossincomeasaguidelineforPITI(principal,interest,taxes,andinsurance)and38percentofmonthlygrossincomeasaguidelineforPIIplusotherdebtpayments. & 4,0000.38$1,520 & $4,0000.33$1,320 \\ \hline Step3:Subtractotherdebtpayments(e.g.paymentsonanautoloan)andanestimateofthemonthlycostsofpropertytaxesandhomeownersinsurance. & 380300 & -300 \\ \hline (c) Affordable monthly mortgoge poyment & $840 & $1,020 \\ \hline Step4:Dividethisamountbythemonthlymortgagepaymentper$1,000basedoncurrentmortgagerates-an5percent,30-yearloan,forexample(seeExhibit77)-andmultiplyby$1,000. & +$$5.371.000 & $5.37$1.000 \\ \hline (b) Affordoble mortgoge amount. & $156,425 & $189,944 \\ \hline Step5:Divideyouraffordablemortgageamountby1minusthefractionalportionofyourdownpayment(e.g.10.1witha10percentdownpayment) & +09 & 409 \\ \hline (c) Affordable home purchase price & $173,805 & $211.049 \\ \hline \end{tabular} NOTE: The two ratios fending institutions use (step 2) and other loan requirements may vary based on a variety of factors, including the type of mortgage, the amount of the down payment, your income level, credit score, and current interest rates. For example, with a down payment of 10 percent or more and a credit score exceeding 720 , the ratios might increase to 40/45 percent in this exhibit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance And Security Global Vulnerabilities Threats And Responses

Authors: Martin S. Navias

1st Edition

1787381366, 978-1787381360

More Books

Students also viewed these Finance questions

Question

4. How is culture a contested site?

Answered: 1 week ago