You are looking to buy a $350,000 home Your household has a combined income of $97,000 The interest rate is 4.23 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? 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: Principal, Interest, Taxes, Insurance) $ % of annual income Is this PITI score within the acceptable ranges for banks to make this loan