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Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation
Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation. (Refer to Exhibit 9-8 and Exhibit 9-9) (Round time value factor to 2 decimal places, Intermediate and final answers to the nearest whole number.) Mortgage coats 4,100 15 5 215 5 335 2.5 Monthly gros Incone Down payment to be made percent of purchase price) Other debe (monthly payment) Monthly estimate for property taxes and insurance 30-year loan Doroon Percent Answer is complete but not entirely correct. Affordable Amount Affordable monthly mortgage payment S Affordable mortgage amount 5 (57.243) Affordable home purchase price 5 4.088,815 (420)
be STAR Pearson eText Bco... T Top Hat ECON 225 Connect Bcore Bibi 98 Housing adfordability and mortgage calor SA $48,000 + 12 $48.000-12 Stept Determine your monthly gross income (annual income divided by 12) $4.000 $4000 SL520 $1320 Step 2: With a da payment of least percent, landers Asia 33 percent of monthly gros Income as a guideline for Principal interest and insurance and 38 percent of monthly gros income as a puldeline for Piplus other debt payments mo -380 -300 -300 Step 3 Subtract other debt payments e. payments on an autofon and an estimate of the monthly costs of property taxes and homeowners Insurance 5 340 S20 Affordable monthly mortgage payment 5734 $1.000 -57.34 * 5.000 Step 4Divide this amount to the monthly mortgage payment Der $1000 based on current mortocerte percent 30 sono camole see 9.9 and multiply by S1000 bordable mortgage amount $114 S3855 Steps Dude your affordable more on the fractional como down 14 with payment Isle horten SE
30 Yours Torm Rate 25 Yours 20 Yans 15 Yours 3.0% $4.22 $4.74 $5.55 $6.91 3.5 4.49 5.01 5.80 715 4.0 4.77 5.28 6.06 7.40 4.5 5.07 5.56 6.33 7.65 5.0 5.37 5.85 6.60 7.91 5.5 5.68 6.14 6.88 8.17 6.0 6.00 6.44 7.16 8.43 6.5 6.32 6,67 7:45 8.71 70 6.65 706 7.75 8.98 75 6.99 7.39 8.06 9.27 8.0 7.34 7.72 8.36 9.56 8.5 769 8.05 8.68 9.85
Expert Solution
Answer :Calculation of Affordable Monthly Mortgage Payment
Monthly Gross Income = $4100
Monthly Mortgage Payment = (Monthly Gross Income * 0.38) - Other Debt - Monthly Estimate of Property taxes and insurance
= (4100 * 0.38) - 215 - 335
= 1008
Note : With downpayment of atleast 5% lender uses rate of 38% of Gross monthly Income for (principal , interest taxes and insurance) plus other debt payments.
Calculation of Affordable Mortgage Amount
Affordable Mortgage Amount = (Monthly Mortgage Payment / Table factor taken from exhibit 7-7) *1000
= (1008 / 6.99) * 1000
= $144206
Calculation of Affordable Home Purchase
Affordable Home Purchase = Affordable Mortgage Amount / (1 - Down payment)
= 144206 / (1- 0.15)
= 169654
Alternatively ,
if With downpayment of atleast 5% lender uses rate of 33% of Gross monthly Income for (principal , interest taxes and insurance)
Calculation of Affordable Monthly Mortgage Payment
Monthly Gross Income = $4100
Monthly Mortgage Payment = (Monthly Gross Income * 0.33) - Monthly Estimate of Property taxes and insurance
= (4100 * 0.33) - 335
= 1018
Calculation of Affordable Mortgage Amount
Affordable Mortgage Amount = (Monthly Mortgage Payment / Table factor taken from exhibit 7-7) *1000
= (1018 / 6.99) * 1000
= $145637
Calculation of Affordable Home Purchase
Affordable Home Purchase = Affordable Mortgage Amount / (1 - Down payment)
= 145637 / (1- 0.15)
= $171338
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