Kathy wants to buy a condominium selling for $95,000. The taxes on the property are $1500 per year, and homeowners’ insurance is $336 per year. Kathy’s gross monthly income is $4000. She has 15 monthly payments of $135 remaining on her van. The bank is requiring 20% down and is charging a 9.5% inter-est rate with no points. Her bank will approve a loan that has a total monthly mortgage payment of principal, inter-est, property taxes, and homeowners’ insurance that is less than or equal to 28% of her adjusted monthly income.

(a) Determine the required down payment.

(b) Determine 28% of her adjusted monthly income. 

(c) Determine the monthly payment of principal and interest for a 25-year loan.

(d) Determine her total monthly payment, including homeowners’ insurance and taxes.

(e) Does Kathy qualify for the loan?

(f)  Determine how much of the first payment on the mortgage is applied to the principal.

(g) Determine the total amount she pays for the condominium with a 25-year conventional loan. (Do not include taxes or homeowners’ insurance.)

(h) Determine the total interest paid for the 25-year loan.