Mattox and Emily need help determining the best mortgage loan to use for a $$300,000$ home they want to purchase. They are considering either a thirty$-$year conforming conventional loan or a thirty$-$year fixed$-$rate FHA mortgage. Their credit history is above average; they have a representative FICO score of $755.$ They have asked you to provide the facts that will help them make their decision.

Here's what you've learned about them in a pre$-$qualification meeting:

Combined gross income is $$8,500$

Their current monthly debt is $$575$

They only want to put the minimum down payment for whichever type of loan they decide to use.

They want a low monthly payment so they can reserve extra funds for building their dream home in $7-10$ years.

Real estate taxes on the home are $$216$ per month

Homeowners insurance will be $$84$ per month

After reviewing the information provided, you ve offered Mattox and Emily these loan options:

An FHA loan with a $30-$year fixed rate of $7\mathrm{.}0\%$

UFMIP is $1\mathrm{.}75\%$ and will be financed

Monthly MIP will be $\mathrm{.}85\%$

$$1,475$ in closing costs may be financed

A conventional loan with a $30-$year fixed rate of $7\mathrm{.}125\%$

The monthly premium on private mortgage insurance with the minimum down payment will be $$205$

Question $1$: Calculate the minimum down payment for each loan type.

Question $2$: Calculate the total payment for each Ioan $($PIT$).$

Question $3$: Calculate the housing expense ratio and total expense ratio for each Ioan type. Do the ratios fall within acceptable limits$?$

Question $4$ : What is one pro and con for each type of loan?

Please show work