Personal Finance: Cash flow for financing a condo

ART 3: BRAD BROOKS-A Continuing Case Brad Brooks listened to your advice about reducing the use of his smartphone (which saves him $250 per month) and reducing his entertainment expenses by $200 per month. He still rents the condo for $1,000 per month. However, now Brad has the urge to upgrade his car and housing situations. He is interested in purchasing an SUV for 35,000. He still owes $10,000 on his two-year-old sedan (which has 57,000 miles) and has found a buyer who will pay him $15,000 cash. This would enable him to pay off his current car loan (loan balance is presently $10,000 on his existing car) and still have $5,000 for a down payment on the SUV. He would finance the remaining $30,000 of the purchase price for four years at 8%. Brad would also like to purchase his condo. He knows that he will enjoy tax advantages with ownership and is eager to reduce his tax burden. He can make the purchase with 10% down, the total purchase price is $90,000. A 30-year mortgage is available with a 5% rate. Closing costs due at signing will total S3.100. The property taxes on his condo will be $1,800 per year, his Property Owners' Association (POA) fee is $70 per month, and his household insurance will increase by $240 a year if he buys the condo. Turn to the worksheets at the end of this chapter to continue this case. PART 3: BRAD BROOKS -A Continuing Case CASE QUESTIONS 1. Refor to Brad's personal cash flow statement that you develiopntertainmeobout balance the w $200 per xpenses whether cash flow statement that you developed in Part 1, wihs by month. Based on his revised personal cash flow statement,g off his can afford to purchase the SUV and still achieve his goals of increasing his savings over the next 4 years. credit card balance and Personal Cash Flow Statement Cash Inflows This Month Total Cash Inflows Cash Outflows Total Cash Outflows Net Cash Flows ART 3: BRAD BROOKS-A Continuing Case Brad Brooks listened to your advice about reducing the use of his smartphone (which saves him $250 per month) and reducing his entertainment expenses by $200 per month. He still rents the condo for $1,000 per month. However, now Brad has the urge to upgrade his car and housing situations. He is interested in purchasing an SUV for 35,000. He still owes $10,000 on his two-year-old sedan (which has 57,000 miles) and has found a buyer who will pay him $15,000 cash. This would enable him to pay off his current car loan (loan balance is presently $10,000 on his existing car) and still have $5,000 for a down payment on the SUV. He would finance the remaining $30,000 of the purchase price for four years at 8%. Brad would also like to purchase his condo. He knows that he will enjoy tax advantages with ownership and is eager to reduce his tax burden. He can make the purchase with 10% down, the total purchase price is $90,000. A 30-year mortgage is available with a 5% rate. Closing costs due at signing will total S3.100. The property taxes on his condo will be $1,800 per year, his Property Owners' Association (POA) fee is $70 per month, and his household insurance will increase by $240 a year if he buys the condo. Turn to the worksheets at the end of this chapter to continue this case. PART 3: BRAD BROOKS -A Continuing Case CASE QUESTIONS 1. Refor to Brad's personal cash flow statement that you develiopntertainmeobout balance the w $200 per xpenses whether cash flow statement that you developed in Part 1, wihs by month. Based on his revised personal cash flow statement,g off his can afford to purchase the SUV and still achieve his goals of increasing his savings over the next 4 years. credit card balance and Personal Cash Flow Statement Cash Inflows This Month Total Cash Inflows Cash Outflows Total Cash Outflows Net Cash Flows