How Should the Costs of Purchasing and Owning a Home Be Categorized? You can categorize the costs associated with home ownership according to whether they are paid at closing, or monthly throughout the life of the mortgage loan, or even after the home is paid off Consider the following situation, and then complete the form that follows by entering the necessary data, classifying the costs according to whether they represent up-front, monthly costs, or both. Finally, answer the associated questions that follow Note: Round all dollar amounts to the nearest whole dollar, and if no payment is necessary, record a zero (0) in the space. In case of deduction, enter the dollar amount without minus sign. When Should David Pay Housing Costs? On April 1 of next year, David is purchasing a $240,000 house and has accepted the Fifth State Bank's offer of a ten-year $211,200 loan with an interest rate of 6%. He has a gross annual income of $70,000 and is concerned about how much his one-time up-front costs and recurring monthly costs will be. He's received the following data and form, but he's not certain when he is to pay each cost-at closing, monthly, or both. Your task is to help David by completing the form and classifying the costs. Hint: Remember that the purchase is expected to close on the first of April. This means the following Although a year's worth of a cost, such as the house's property taxes, may be owed by the home buyer, a portion of the . . A portion of a cost, such as the homeowner's insurance premium, may be deposited into an escrow account so that the * For its mortgage, the bank will permit a 12% down payment but will also require 4 points. Mortgage insurance is required if . A private mortgage insurance (PMI) policy, if necessary, is expected to cost $845 per year, but is distributed 12 times per .David has purchased a home warranty policy, which carries an annual premium of $480 and is paid 12 times per year, and a total cost will be paid by the seller accumulated funds will be available to pay the entire annual premium when it is due next year the loan-to-value (LTV) ratio is less than 20% year homeowner's insurance policy, which costs $2,400 per year. Premiums for these two policies are paid to the respective insurance companies from an escrow account at the bank. . Credit report fee: $85 Attomey fees: $1,200 . Tite search and deed recording fee: $480 . Home, termite, and radon Inspections: $575 . Loan origination fee: $900 . Tite insurance policy Lender: $37!5 . Mortgage payment (principal and interest): $2,345.Property taxes on the house: $12,000 per year .Tite insurance policy-Homeowner: $450 . Messenger and document fees: $315 Appraisal and survey fees: $600 The property taxes and homeowner's policy should be pro-rated . Amount Paid Cost Incurred At Closing Monthly Using the given information, what is the loan-to-value (LTV) ratio required by the Fifth State Bank? 12.00% 0 113.64% o 88.00% How Should the Costs of Purchasing and Owning a Home Be Categorized? You can categorize the costs associated with home ownership according to whether they are paid at closing, or monthly throughout the life of the mortgage loan, or even after the home is paid off Consider the following situation, and then complete the form that follows by entering the necessary data, classifying the costs according to whether they represent up-front, monthly costs, or both. Finally, answer the associated questions that follow Note: Round all dollar amounts to the nearest whole dollar, and if no payment is necessary, record a zero (0) in the space. In case of deduction, enter the dollar amount without minus sign. When Should David Pay Housing Costs? On April 1 of next year, David is purchasing a $240,000 house and has accepted the Fifth State Bank's offer of a ten-year $211,200 loan with an interest rate of 6%. He has a gross annual income of $70,000 and is concerned about how much his one-time up-front costs and recurring monthly costs will be. He's received the following data and form, but he's not certain when he is to pay each cost-at closing, monthly, or both. Your task is to help David by completing the form and classifying the costs. Hint: Remember that the purchase is expected to close on the first of April. This means the following Although a year's worth of a cost, such as the house's property taxes, may be owed by the home buyer, a portion of the . . A portion of a cost, such as the homeowner's insurance premium, may be deposited into an escrow account so that the * For its mortgage, the bank will permit a 12% down payment but will also require 4 points. Mortgage insurance is required if . A private mortgage insurance (PMI) policy, if necessary, is expected to cost $845 per year, but is distributed 12 times per .David has purchased a home warranty policy, which carries an annual premium of $480 and is paid 12 times per year, and a total cost will be paid by the seller accumulated funds will be available to pay the entire annual premium when it is due next year the loan-to-value (LTV) ratio is less than 20% year homeowner's insurance policy, which costs $2,400 per year. Premiums for these two policies are paid to the respective insurance companies from an escrow account at the bank. . Credit report fee: $85 Attomey fees: $1,200 . Tite search and deed recording fee: $480 . Home, termite, and radon Inspections: $575 . Loan origination fee: $900 . Tite insurance policy Lender: $37!5 . Mortgage payment (principal and interest): $2,345.Property taxes on the house: $12,000 per year .Tite insurance policy-Homeowner: $450 . Messenger and document fees: $315 Appraisal and survey fees: $600 The property taxes and homeowner's policy should be pro-rated . Amount Paid Cost Incurred At Closing Monthly Using the given information, what is the loan-to-value (LTV) ratio required by the Fifth State Bank? 12.00% 0 113.64% o 88.00%