Question 3: A couple have saved $120,000 for the down payment on a home. Their monthly gross incomeis $8,000. They have no existing loans. Their bank has upper limit of 32% for GDS ratio and 40% for theTDS ratio. Allowing for property taxes of $150 per month and heating costs of $100 per month, whatmaximum monthly mortgage payment do the GDS and TDS ratios permit? What is the maximum mortgageloan for which the couple can qualify (Use a 30-year amortization and an interest rate of 1.6%compounded semi-annually for a five-year term)? What is the maximum amount they can pay for buyinga house?

In this we have to calculate maximum monthly mortgage payment possible based on GDS and TDS ratio.

Question 3: A couple have saved $120,000 for the down payment on a home. Their monthly gross inco is $8,000. They have no existing loans. Their bank has upper limit of 32% for GDS ratio and 40% for TDS ratio. Allowing for property taxes of $150 per month and heating costs of $100 per month, wl maximum monthly mortgage payment do the GDS and TDS ratios permit? What is the maximum mortga loan for which the couple can qualify (Use a 30-year amortization and an interest rate of 1. compounded semi-annually for a five-year term)? What is the maximum amount they can pay for buy a house?

Question 3: A couple have saved $120,000 for the down payment on a home. Their monthly gross inco is $8,000. They have no existing loans. Their bank has upper limit of 32% for GDS ratio and 40% for TDS ratio. Allowing for property taxes of $150 per month and heating costs of $100 per month, wl maximum monthly mortgage payment do the GDS and TDS ratios permit? What is the maximum mortga loan for which the couple can qualify (Use a 30-year amortization and an interest rate of 1. compounded semi-annually for a five-year term)? What is the maximum amount they can pay for buy a house?

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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Not sure where to start this one Suppose that you purchase a new home that costs $180,000. A local bank offers you a 3% fixed rate mortgage loan for 30 years. Also, you are required to make a 20% down payment immediately. a) Find your monthly payment. b) Find the interest amount and the principal amount in your first monthly payment. c) Find the total interest paid for 30 years.
15. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You've decided to buy a house that is valued at $1 million. You have $300,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $700,000 mortgage, and is offering a standard 30-year mortgage at a 12% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate in percentage form to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a…
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Please answer all subparts with explanation. I know it's not according to your guidelines. Thanks I will really upvote
Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You’ve decided to buy a house that is valued at $1 million. You have $200,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $800,000 mortgage, and is offering a standard 30-year mortgage at a 9% fixed nominal interest rate (called the loan’s annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate used to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a 15-year, $800,000 loan at…
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