**Understanding PMI and Home Equity**When purchasing a home with less than a 20% down payment, an additional monthly fee known as PMI (Private Mortgage Insurance) is required until reaching 20% equity. Monitoring equity is crucial to request PMI removal. **Case Study: Ken Buckmiller**- **Home Appraisal**: $305,000- **Mortgage Amount**: $290,000 - **Interest Rate**: 5% for 30 years- **PMI**: $279.17 per month- **Current Mortgage Balance**: $180,600**Questions**:1. **Monthly Payment (including PMI)?**2. **Has Ken reached 20% equity?****Note**: Use intermediate calculations and round all final answers to the nearest cent. For the calculation of equity, refer to Table 15.1, which provides additional details. ### Amortization Table (Mortgage Principal and Interest per $1,000)#### OverviewThis amortization table provides the monthly mortgage payment amount per $1,000 borrowed for various interest rates and loan terms. The table includes calculations for interest-only payments as well as full amortization over 10, 15, 20, 25, 30, and 40 years.#### Table Columns- **Rate**: The annual interest rate expressed as a percentage.- **Interest Only**: The monthly interest payment when paying interest only.- **10 Year, 15 Year, 20 Year, 25 Year, 30 Year, 40 Year**: The monthly payment required to fully amortize (pay off) the loan in the respective term.#### Details- **Interest Rates** range from 2.000% to 6.750%.- **Interest Only Payments** decline as the interest rate decreases, starting from 0.56250 per month for a 6.750% rate to 0.16667 for a 2.000% rate.- **Amortization Payments**: - **10 Year Term**: Monthly payments range from 9.20135 at a 2.000% rate to 11.48241 at a 6.750% rate. - **15 Year Term**: Payments range from 6.43509 to 8.84909. - **20 Year Term**: Payments range from 5.05883 to 7.60364. - **25 Year Term**: Payments range from 4.23854 to 6.90912. - **30 Year Term**: Payments range from 3.69619 to 6.48598. - **40 Year Term**: Payments range from 3.02826 to 6.03357.This table is useful for individuals looking to understand how their monthly payments will be affected by different interest rates and loan terms, allowing for a better-informed decision when selecting a mortgage plan.

If you buy a home with less than 20% down, you will pay an additional monthly fee, PMI (private mortgage insurance), until you reach 20% equity. Keep track of when you reach 20% equity so you can request to have your PMI removed. Ken Buckmiller's home recently appraised at $305,000. His mortgage was for $290,000 at 5% for 30 years with PMI of $279.17 per month. What is his monthly payment plus PMI? His mortgage balance is currently $180,600. Has he reached 20% equity? (Use Table 15.1.) Note: Round your intermediate calculations and final answer to the nearest cent. Monthly payment Has he reached 20% equity?

If you buy a home with less than 20% down, you will pay an additional monthly fee, PMI (private mortgage insurance), until you reach 20% equity. Keep track of when you reach 20% equity so you can request to have your PMI removed. Ken Buckmiller's home recently appraised at $305,000. His mortgage was for $290,000 at 5% for 30 years with PMI of $279.17 per month. What is his monthly payment plus PMI? His mortgage balance is currently $180,600. Has he reached 20% equity? (Use Table 15.1.) Note: Round your intermediate calculations and final answer to the nearest cent. Monthly payment Has he reached 20% equity?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Fritzes are buying a house that sells for $107,000.The bank is requiring a minimum down payment of 20%.To obtain a 40-year mortgage at 9.5% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 20% down payment. c) Find the cost of 4 points on the mortgage. a) The required down payment is $ enter your response here.
a You want to buy house that costs $170,000. You have $17,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $153,000. However, the realtor persuades the seller to take $153,000 mortgage called a seller take-back mortgage) at a rate of 8% provided the loan is paid off in full in 3 years. expect to inhent $170,000 in 3 years, but light now all you have is $17,000 and you can afford to make payments of no more than $19,000 per year given your salary. (The loan would call for monthly payments, but assume things.) end-of-year annual payments to simplify p a) If the loan was amortized over 3 years, how large would each annual payment be? Round your answer to the nearest cent b) If the loan was amortized over 30 years, What would each payment be? Round your answer to the nearest cent. C) To satisfy the seller, the 30-year mortgage loan would be written as a balloun note, which means at the end of the third year, you would have to make the
Please answer only correct with explanation. I will really upvote. Thanks
This problem is a complex financial problem that requires several skills, perhaps some from previous sections.Clark and Lana take a 30-year home mortgage of $125,000 at 7.9%, compounded monthly. They make their regular monthly payments for 5 years, then decide to pay $1200 per month. (a) Find their regular monthly payment. (Round your answer to the nearest cent.) (a) Find their regular monthly payment. (Round your answer to the nearest cent.) (c) How many payments of $1200 will it take to pay off the loan? Give the answer correct to two decimal places. (d) Use your answer to part (c) to find how much interest they save by paying the loan this way. (Round your answer to the nearest cent.)
I need the answer of the question attached. Please provide all possible answers. Thank you!
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If you buy a home with less than 20% down, you will pay an additional monthly fee, PMI (private mortgage insurance), until you reach 20% equity. Keep track of when you reach 20% equity so you can request to have your PMI removed. Ken Buckmiller’s home recently appraised at $307,000. His mortgage was for $292,000 at 5% for 30 years with PMI of $299.17 per month. What is his monthly payment plus PMI? His mortgage balance is currently $184,200. Has he reached 20% equity? (Use Table 15.1.) Note: Round your intermediate calculations and final answer to the nearest cent. The answer is NOT $1,866.63 Monthly payment:????
This problem is a complex financial problem that requires several skills, perhaps some from previous sections. Clark and Lana take a 30-year home mortgage of $124,000 at 7.5%, compounded monthly. They make their regular monthly payments for 5 years, then decide to pay $1400 per month. (a) Find their regular monthly payment. (Round your answer to the nearest cent.) $ (b) Find the unpaid balance when they begin paying the $1400. (Round your answer to the nearest cent.) $ (c) How many payments of $1400 will it take to pay off the loan? Give the answer correct to two decimal places. monthly payments (d) Use your answer to part (c) to find how much interest they save by paying the loan this way
The Fritzes are buying a house that sells for $107,000. The bank is requiring a minimum down payment of 20%. To obtain a 40-year mortgage at 9.5% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 20% down payment. c) Find the cost of 4 points on the mortgage. a) The required down payment is S
Suppose you have just purchased your first home for $550,000. At the time of purchase you could only afford to commit to a down payment of $55,000. In order to make the loan, the lender requires you to obtain private mortgage insurance (PMI) on their behalf. Suppose over time you paid down the principal of the loan to $535,000 and at that point in time you can no longer make any mortgage payments (i.e., you default on the loan). If the lender were to foreclose on your property and sell it for $508,000 (net proceeds), what would the lender's loss of principal be taking into consideration the protection of mortgage insurance? (Let's assume that the PMI in this case covers the top 25% of the loan.)