Mortgage; how much can you afford? $900.00 mortage

List your salary _____$3,000 per month______ Identify money earned in savings account: _$1,000 per month___________

In part I, you had to decide how your money would be allocated mortgage or rent. You are now going to be a homeowner. Congratulations! Now is the time to see if you qualify for a mortgage, step by step.

Step one: Pick a house, what is the cost.

What is the cost of the house that you want to buy? Make sure to details about of the advertised sale price in your house, number of bedrooms, bathroom, etc.

Step two: Down payment.

Use the money you earned from the savings account in Part II Investment Time! as your down- payment. You can use the money now, since time is of no consequence in this project. What is this amount?

Most mortgage companies are looking for 1st-time homebuyers to put down 20% of the cost of the house. Does the amount from above qualify as 20% of the cost of the house? Whether it does or not, you will be using this amount as your down payment. Show this calculation.

Step three: How much is the mortgage?

Now that you have your down payment (which may or may not be 20% of the cost of the house), the remaining amount will be covered by the mortgage, which is a loan. How much is the remaining amount? Show this calculation.

You need to find a 30-year fixed mortgage with an interest rate that you can afford, but you have no control over interest rates. Find an advertised mortgage interest rate and calculate your monthly payment. Make sure to include a copy of your advertised mortgage rate in your project. Highlight the mortgage rate on the printout.

Step four: Can you afford it?

Determine 28% of your adjusted monthly income. This is the maximum amount of your income that you can expect to pay to cover the mortgage. How does this amount compare to your disposable income amount? Show this calculation.

Can you afford this mortgage? You must support this answer with facts. A yes or no answer will not earn any points.

Whether or not you can afford this mortgage, let us think about how much money you will ultimately spend on this house. Calculate the total amount of money you will pay at the end of the 30-year mortgage plus the down payment. How much more than the original purchase price is this amount?