Tom and Nancy want to buy a house in a particular neighborhood. they have two children ages 1 and 4. The average price home in this neighborhood runs about $350,000.Together their family income is $100,000.They have saved $75,000. The home they want to purchase costs $300,000. Taxes on the home run $3.00 per $100 of assessed value of the home. For new homes the assessed value is equal to 75% of the purchase price. Insurance runs half of one percent of the purchase price of the home. An Adjustable Rate Mortgage (ARM) requires a 10% down payment. Conventional loans require 20% down payment. It did not give me a tenure time frame, so I am going to assume 30 years

Interest for an ARM currently is 4.5 %. The conventional loans are 5.25% today.

Monthly things to know 1.) Down Payment: $30,000

2.) Insurance: $125

3.) Taxes: $562.5

4.) Principal and Interest: $1,368.05

5.) Total: $2,055.55 Again, these are the numbers for an ARM.

My Question for tutor: If the couple were to get a conventional loan, what would their cost be using the price of home and figures for figuring taxes and insurance. You will need to use a mortgage calculator. You can find them by asking Google or in one of the files in this module's content area.

a. Monthly principal and interest____________________

b. Monthly taxes________________________________

c. Monthly insurance_____________________________

d. Total cost of house payment using aconventional loan.