Based on the following data, would you recommend buying or renting?Rental CostsAnnual rent $ 7,480Insurance $ 155Security deposit $ 700Buying CostsAnnual mortgage payments $ 10,000 ($9,625 is interest)Property taxes $ 1,820Down payment and closing costs $ 4,700Growth in equity $375Insurance and maintenance $ 1, 150Estimated annual appreciation $ 1,800Assume an after-tax savings interest rate of 8 percent and a tax rate of 30 percent. Assume this individualhas other tax deductions that exceed the standard deduction amount.

The problem involves the decision making involved in buying or renting property. The first and most…

Answered: Based on the following data, would you…

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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Using the residential mortgage-debt to income ratio of 28%, and total-debt to income ratio of 36%, what is the largest loan (with a 30-year FRM at 6%) you can qualify for if you make $38,000 a year and have outstanding debt with $250/month payments? O $113,418 O $140,107 O $150,112 $155,616 O $148,445
Suppose you want to purchase a $279,000 home, and you have the required $62,000 down payment in savings. Principal Interest Rate Terms (Yrs) Payments Total Total Payments Interest Of Loan Of Loan $217,000 4.000% 20 Complete the table below. Principal Interest Rate Terms (Yrs) Payments Total Pymts Total Interest $217,000 4.000% 20
With the following information, compute the net benefit of refinancing: Current loan balance: $200,000 Remaining term: 15 years Interest rate: 6.5% Old loan monthly payment: $1742.22 Expected number of future payments you will make: 72 Interest rate available on a new loan: 4.5% Cost of refinancing:5% of the outstanding balance. what is the resulting net benefit?
Assuming a 28% lender's affordability ratio, estimated monthly property taxes and insurance of P250, a 25% down payment (of the purchase price), and an annual gross income of P84,800, calculate the maximum purchase price based on monthly income. The monthly payment will occur at the end of the month and you plan to pay off the mortgage over a 30-year period at a 6.25% annual interest rate. a.P374,343b.P280,757c.P282,219d.P321,360e.None of the above
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.) Note: Round time value factor to 2 decimal places, Intermediate and final answers to the nearest whole number. Monthly gross income Down payment to be made (percent of purchase price) Other debt (monthly payment) Monthly estimate for property taxes and insurance 30-year loan Affordable monthly mortgage payment Affordable mortgage amount Affordable home purchase price Affordable Amount Mortgage Costs $ 5,150 20 Percent $ 300 $ 400 6.5 Percent
You borrow $675,000 to buy a home using a 30-year mortgage with an interest rate of 3.675 percent and monthly payment. Calculate the interest portion of the 20th payment. Disregard property taxes and mortgage insurance. Group of answer choices $2,006 $1,999 $2,002 $1,818 $1,821
Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation. (Refer to the images) Note: Round time value factor to 2 decimal places, intermediate and final answers to the nearest whole number. Mortgage Monthly gross income $ 4,700 Down payment to be made (percent of purchase price) 20% Other debt (monthly payment) $ 260 Monthly estimate for property taxes and insurance $ 490 30-year loan 8.0% 1.) What is the affordable monthly mortgage payment? 2.) What is the affordable mortgage amount? 3.) What is the affordable house purchase price?
Please Provide Answer with calculation
Suppose you obtain a 30 year mortgage loan of 197,000$ at an annual interest rate of 8.1%. The annual property tax bill is $967 and the annual fire insurance premium is 495$. Find the total monthly payment for the mortgage, property tax, and fire insurance.
Find the following for a $200,000 fixed-rate mortgage and the given information. a) Monthly mortgage payment (principal and interest) b) Monthly house payment (including property taxes and insurance) c) Initial monthly interest d) Income tax deductible portion of initial house payment e) Net initial monthly cost for the home (considering tax savings) Annual Owner's Income Tax Property Tax $1188 Term of Mortgage 20 years Interest Rate 6% a) The monthly mortgage payment is $ (Round to the nearest dollar as needed.) Annual Insurance $624 Bracket 15%
Suppose you earn a gross income of $2,915.00 per month and apply for a mortgage with a monthly PITI of $900.74. You have other financial obligations totaling $174.90 per month. If the lending ratio guidelines are as given in the table below, what type of mortgage, if any, would you qualify for? Mortgage Type Housing Expense Ratio Total Obligations Ratio FHA 29% 41% Conventional 28% 36% O FHA only O Conventional only O FHA and Conventional O None of the above
You have been assigned to estimate the interest rates that your company may have to pay when borrowing money in the near future. The following information is available.kPR = 2%MR = 0.1% for a 1 year loan increasing by 0.1% for each additional yearLR = 0.05% for a 1 year loan increasing by 0.05% for each additional yearDR = 0 for a 1 year loan, 0.2% for a 2-year loan, increasing 0.1% for each additional yearExpected Inflation Rates Year 1 = 7% Year 2 = 5% Year 3 and thereafter = 3% a. Calculate the inflation adjustment (INFL) for a 5-year loan. b. Calculate the appropriate interest rate for a 5-year loan.

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