You are looking to buy a $$350,000$ home

Your household has a combined income of $$97,000$

Interest Rates

What is the best interest rate for a $30-$year fixed rate:

Select $4$ lending institutions and research which one has the best interest rate:

Provide:

Lending Institutions

Interest Rate and APR for each institution

Why there is a difference between the interest rate and the APR

$2.$ Purchase cost

Home Purchase price: $$350,000$

You have enough cash to cover: $20\%$ down payment $+$ points and fees

Use the best interest rate from part $1$ to get a $30-$Year Fixed Rate Mortgage

Number of points paid $=2$

Each point purchased reduces the interest rate by $\mathrm{.}25\%$

Loan origination rate $=1\%$ of home purchase price

Appraisal fee: $$500$

Filing fee: $$250$

Credit report fee: $$50$

Provide:

How much cash do you need to purchase $($ down payment $+$ points and fees$)$ the home?

What would be your loan amount?

Using the best interest rate $($not APR$)$ from part $1$ and buying $2$ points, what would be your loan interest rate?

What will be your monthly mortgage?

$3.$ Bank Evaluations

Bank Evaluations

Based on:

Property tax rate $\frac{?}{yr}=1\%$ of home purchase price

Home insurance rate$/$yr $=\mathrm{.}5\%$ of home purchase price

Monthly car payment$($s$)=$$$\frac{300}{?}$ month

Credit card payments $=$$$\frac{50}{?}$ month

Student loans $=$$$\frac{400}{?}$ month

Prior to the lending institution agreeing to loan you the money to buy the house the bank does a PITI and Annual evaluations PITI:

How much is your Annual PITI? $($PITI: Principle, Interest, Taxes, Insurance$)$

$

$\%$ of annual income

Is this PITI score within the acceptable ranges for banks to make this loan?

Annual Income Debt:

What is your annual income debt? $($Annual Income Debt: PITI $+$ all other debt payments$)$

$

$\%$ of annual income

Is it within the acceptable range for banks to make this loan?

Your answer should provide the following:

Lending Institutions

Interest Rate and APR for each institution

Why there is a difference between the interest rate and the APR

How much cash do you need to purchase $($down payment $+$ points and fees$)$ the home?

What would be your loan amount?

Using the best interest rate $($not APR$)$ from part $1$ and buying $2$ points, what would be your loan interest rate?

What will be your monthly mortgage?

PITI:

How much is your Annual PITI? $($PITI: Principle, Interest, Taxes, Insurance$)$

$

$\%$ of annual income

Is this PITI score within the acceptable ranges for banks to make this loan?

Annual Income Debt:

What is your annual income debt? $($Annual Income Debt: PITI $+$ all other debt payments$)$

$

$\%$ of annual income

Is it within the acceptable range for banks to make this loan?