Home mortgage rates have decreased and Howard plans to refinance his home. He will refinance $85,000 at either 5.25% for 15 years or 5.875% for 30 years.
In each case, what is his monthly payment and how much interest will he pay?
Suppose you have saved $15,000 toward a down payment on a house and your total yearly income is $45,000. What is the most you could afford to pay for a house?
Assume you pay 0.5% of the value for insurance, you pay 1.5% of the value for taxes, your closing costs will be $2000, and you can obtain a fixed-rate mortgage for 30 years at 6% interest.
The solution will be given at the end of the section.
The 2 most common guidelines for buying a house are:
The maximum house price is 3 times your annual gross income.
Your maximum monthly housing expenses should be 25% of your gross monthly income. (housing expenses include mortgage payment, insurance and property taxes)
Suppose you have saved $15,000 toward a down payment on a house and your total yearly income is $45,000. What is the most you could afford to pay for a house?
Assume you pay 0.5% of the value for insurance, you pay 1.5% of the value for taxes, your closing costs will be $2000, and you can obtain a fixed-rate mortgage for 30 years at 6% interest.
Section 13.1 pg 812 Show use of a formula on each problem (1, 3, 13a, 27, 28 and find the most recently released CPI - I think it was in the news last week.)
Section 13.2 pg 829(3, 9, 11, 15, 21 *** for 15 and 21 use an amortization website calculator )
Section 13.3 pg 842 Show work on each problem (1, 5, 7, 9, 13, 14, 23)
NOTE: You may use an amortization website to calculate any amortization rather than the textbook table .
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