Q Search Ch OS: Assignment - Making Automobile and Housing Decisions Can Abigail and Alexander Afford This Home Using the Monthly Income Loan Criterion? Next week, your friends Abigail and Alexander want to apply to the Third Universal Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $215,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows. (Note: When completing the form, round each dollar amount to the nearest whole dollar.) To assist in the preparation of the worksheet, Abigail and Alexander also collected the following information: . Their financial records report a combined gross before-tax annual income of $145,000 and current (premortgage) installment loan, credit card, and car loan debt of $2,115 per month Their property taxes and homeowner's insurance policy are expected to cost $2,150 per year. . Their best estimate of the Interest rate on their mortgage is 7.5%, and they are interested in obtaining a 15-year los They have accumulated savings of $50,500 that can be used to satisfy the home's down payment and closing costs The lender requires a minimum 20% down payment, and an affordability ratio that ranges from a minimum of 25% to a maximum of 30% aiz!) A table of monthly payments (necessary to repay a $10,000 loan) follows: 25 Years 30 Years Interest Rate (%) 5.0 5.5 10 Years 106.0655 108.5263 111.0205 Loan Maturity 15 Years 20 Years 79.0794 65.9956 81.7083 65.7887 43857 71.6431 87.1107 74,5573 89.8828 77.5299 92.7012 30.5593 95.5652 13.6440 58.4590 61.4087 64.4301 67.5207 53.6522 56.7789 59.9551 6.0 6.5 113.5450 116.1085 7.0 63.2068 56.5302 59.9215 7.5 70.6729 73.8991 771816 118.7018 3.0 121 3276 73 3765 Their financial records report a combined gross before-tax annual income of $145,000 and current (premortgage) Installment loan, credit card, and car loan debt of $2,115 per month. Their property taxes and homeowner's Insurance policy are expected to cost $2,150 per year. Their best estimate of the Interest rate on their mortgage is 7.5%, and they are interested in obtaining a 15-year loan. They have accumulated savings of $50,500 that can be used to satisfy the home's down payment and closing costs. The lender requires a minimum 20% down payment, and an affordability ratio that ranges from a minimum of 25% to a maximum of 30%. A table of monthly payments (necessary to repay a $10,000 loan) follows: Interest Rate (%) 5.0 10 Years 106.0655 25 Years 30 Years 58.4590 53.6822 5.5 Loan Maturity 15 Years 20 Years 79.0794 65.9956 81.7083 68.7887 84.3857 71.6431 87.1107 74.5573 108.5263 61.4082 56.7789 6.0 111.0205 64.4301 59.9551 6.5 113.5480 67.5207 63.2068 7.0 116.1085 89.8828 77.5299 70.6779 7.5 118.7018 66.5302 69.9215 92.7012 80.5593 73.8991 8.0 121.3276 95.5652 83.6440 77.1816 8.5 73.3765 76.8913 123.9857 98.4740 9.0 80.5222 83.9196 101.4267 86.7823 89.9726 93.2131 126.6758 129.3976 80.4623 9.5 104.4225 84.0854 87.3697 90.8701 10.0 132.1507 107.4605 96.5022 87.7572
