Question #2:

You decide to buy a home. Suppose you have $20,000 available in cash. You have been informed that you would pre-qualify for a 30-year (360 month), 3.5% APR mortgage loan for as much as $195,000. Suppose the house you want costs $210,000. You also need $3000 for closing costs, which you choose to pay from your available cash. This leaves you $15,000 for a down payment. The other $195,000 will come from a mortgage loan. The monthly property tax and insurance are $100 each.

1. Create a monthly loan amortization schedule.
2. What is your monthly mortgage payment?
3. Compute total monthly cash outflows paid to the bank.