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MystatLab Homework Help Sample

Q1

A couple found a house selling for $114 comma 500. The taxes on the house are $1300 per year, and insurance is $340 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 15% down payment and 3 points, and the interest rate is 10%. The couple's gross monthly income is $4750. They have more than 10 monthly payments remaining on a car, a boat, and furniture. The total monthly payments for these items are $420. Their bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners' insurance that is less than or equal to 28% of their adjusted monthly income. Complete parts a) through g) below.

Q2.

MystatLab Homework Help Sample Answer

A couple found a house selling for $ 113,500. The taxes on the house are $1400 per year, and insurance is $320 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 15% down payment and 3 points, and the interest rate is 10%. The couple's gross monthly income is $ 4750.They have more than 10 monthly payments on a car, a boat, and furniture. The total monthly payments for these items is $430.Their bank will approve a loan that has a total monthly mortgage payment of principal,interest,property taxes,and homeowners' insurance that is less than or equal to 28% of their adjusted monthly income.
a. Determine the required down payment
b. Determine the cost of 3 points
c. Determine 28% of their adjusted monthly income
d. Determine the monthly payments of principal and interest for a 20 year loan
e. Determine their total monthly payment, including homeowners' insurance and taxes
f. Determine whether the couple will qualify for the 20 year loan
g. Determine how much of the first payment on the loan is applies to the principal.

Answer

House Cost

113500

Tax

1400

Per year

116.6666667

per month

Insurance

320

Per year

26.66666667

per month

Downpayment

17025

0.15*113500

Points

3

Rate

0.1

Gross Monthly income

4750

Monthly EMI for Other Prooduct

430

Cost of 3 points

2894.25

0.03*(113500-17025)

Adjusted monthly income

4320

4750-1430

28% of adjusted monthly income

1209.6

after 3 points rate

0.12

Monthly payment for 20 yrs

$1,062.27

using PMT Function

Total Monthly Payment

$1,205.61

Yes they will qualify for the loan as 1205.61 is less than 1209.6 which is the required critertia.

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