Amanda and Blake have found a house, which owing to a depressed real estate market costs only $201,500. They will put $22,000 down and finance the remainder with a 30-year mortgage loan at 3% interest (compounded monthly). (a) How much is their monthly loan payment? (b) How much interest will they pay in the second payment? (c) They will also have the following expenses: property taxes of $2100, homeowners’ insurance of $1625, and $290 mortgage insurance (in case one of them dies before the loan is repaid, a requirement of the bank). These annual amounts are paid in 12 installments and added to the loan payment. What is their full monthly cost? (d) If they can afford $1200 per month, can Amanda and Blake afford this house?
Amanda and Blake have found a house, which owing to a depressed real estate market costs only $201,500. They will put $22,000 down and finance the remainder with a 30-year mortgage loan at 3% interest (compounded monthly). (a) How much is their monthly loan payment? (b) How much interest will they pay in the second payment? (c) They will also have the following expenses: property taxes of $2100, homeowners’ insurance of $1625, and $290 mortgage insurance (in case one of them dies before the loan is repaid, a requirement of the bank). These annual amounts are paid in 12 installments and added to the loan payment. What is their full monthly cost? (d) If they can afford $1200 per month, can Amanda and Blake afford this house?
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