You are looking to buy a $350,000 home

1. 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 .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

Based on: Property tax rate/yr = 1% of home purchase price Home insurance rate/yr = .5% of home purchase price Monthly car payment(s) = $300/month Credit card payments = $50/month Student loans = $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?