3) The Johnsons have accumulated a nest egg' of $40,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of $2400/month in monthly payments toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed $3000. If local mortgage rates are 5.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range of houses that they should consider? 'A nest egg is a substantial sum of money or other assets that have been saved or invested for a specific purpose.

3) The Johnsons have accumulated a nest egg' of $40,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of $2400/month in monthly payments toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed $3000. If local mortgage rates are 5.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range of houses that they should consider? 'A nest egg is a substantial sum of money or other assets that have been saved or invested for a specific purpose.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Rex is planning to buy a house. His gross income is $72000 and his net income is $60000. He saved $30000 for the downpayment. The monthly expenses are $250 for property taxes and $150 for heat. His bank uses the GDSR maximum approval ratio of $32%. The approval interest rate on a 5-year term will be 4.64%. Calculate the mortgage payment that he can afford on the new house.
The Nicols are buying a house selling for $245,000. They pay a down payment of $45,000 from the sale of their current house. To obtain a 20-year mortgage at a 6.5% interest rate, the Nicols must pay 3.5 points at the time of closing. a) What is the amount of the mortgage? b) What is the cost of the 3.5 points? a) The amount of the mortgage is $ b) The cost of the 3.5 points on the mortgage is $
Alan and Samantha Brown have a mortgage with the Bank of America. The bank requires the Browns to pay their homeowner's insurance, property taxes, and mortgage in one monthly payment to the bank. Their monthly mortgage payment is $1,450.30, their semi-annual property tax bill is $6,470, and their annual homeowner's insurance bill is $980. How much is the monthly payment they make to Bank of America?
The Johnsons have accumulated a nest egg1of $40,000 that they intend to use as a down payment toward thepurchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, theyhave decided to invest a minimum of $2400/month in monthly payments toward the purchase of their house.However, because of other financial obligations, their monthly payments should not exceed $3000. If localmortgage rates are 5.5%/year compounded monthly for a conventional 30-year mortgage, what is the price rangeof houses that they should consider?1A nest egg is a substantial sum of money or other assets that have been saved or invested for a specific purpose.
Your cousin and her partner have a combined gross income of $10,111 and monthly expenses totaling $3,205. They plan to buy a house with a mortgage whose monthly PITI will be $2,000. (a) What is your cousin and her partner's combined housing expense ratio? (b) What is their total obligations ratio? (c) For what kind of mortgage can they qualify, if any? (d) If they do not qualify for an FHA mortgage, by how much should they reduce their monthly expenses in order to be eligible? (Set up an equation and solve it.)
Help me with this one please im stuck badly
Jasmine purchased a home in San Francisco near her best friend Sallie. The purchase price of the home was $ 2,000,000. However, Jasmine only financed 80% of the home value as she was able to secure the $400,000 down payment to help lower her monthly payments. What is her monthly payment if she financed at today's rate of 7.55% for a 15-year mortgage?
Ronald and Samantha Brady recently had their condominium in Port Isaac appraised for $324,800. The balance on their existing first mortgage is $154,720. If their bank is willing to loan up to 75% of the appraised value, what is the amount (in $) of credit available to the Bradys on a home equity line of credit? $
Jose and Rosa are looking for a condo. Their combined gross annual income is $61,000. The best mortgage rate offered by their bank is a 3.12 percent, five-year fixed rate compounded semi-annually with a 20-year amortization. The annual property taxes are estimated at $1,360, and the annual heating costs are $1,340. Their personal debt consumption is $500 per month. Condo fees are estimated at $700 per month. The bank's guideline for TDS is 30 percent. Based on this information, what is the maximum monthly mortgage payment they could afford? The maximum monthly mortgage payment they could afford is $ (Round to the nearest cent.)
4.Ben and Jen are looking at a home that has an annual property tax of $3700 and an average heating cost of $225.00 per month. Ben on average works 40 hours per week and makes $40.70 per hour. Jen receives a salary of $4050.00 per month. a. According to the GDSR formula, what is the maximum monthly mortgage payment they can afford? b. What price how house could they afford if they have a down payment of $25 000 saved up and take a mortgage for 25 years with monthly payments at an interest rate of 3.5% compounded monthly?
Anthony planned to buy a house but could afford to pay only $9,000 at the end of every 6 months for a mortgage with an interest rate of 5.70% compounded semi-annually for 25 years. She paid $30,000 as a down payment. a. What was the maximum amount she could afford to pay for a house? b. What was her total amount spent for the house through the mortgage period including the down payment (not taking the time-value of money into account)? c. What was the total amount of interest paid through the mortgage period?
The Tremblays have been preapproved by their bank to enter the housing market with a mortgage interest rate of 8.6%. They have $30,000 set aside for a down payment. They have also calculated that they can afford a monthly payment of $1,350. They have narrowed their search to three houses and are hoping that financial constraints will narrow their choices. The three houses will cost the following amounts: $150,000, $270,000, and $400,000. The bank will add $50 to each mortgage payment if they put less than 20% down and an additional fee of $50 more to each payment if they put less than 10% down. a. Which of these houses can they afford with a 30-year mortgage? b. Which of these houses can they afford with a 15-year mortgage? c. Which house do you think they should buy?

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