The Ruffins are negotiating with two banks for a mortgage to buy a house selling for $145,000. The terms at bank A are a 25% down payment, an interest rateof 10%, a 30-year conventional mortgage, and 3 points to be paid at the time of closing. The terms at bank B are a 15% down payment, an interest rate of11.0%, a 25-year conventional mortgage, and no points. Which loan should the Ruffins select in order for the total cost of the house to be less?Click the icon to view the table of monthly payments.From which bank should the Ruffins take the loan?Bank BO Bank A Monthly Principal and Interest Payment per $1000 of MortgageRate %3.03.54.04.55.05.56.06.5Number of Years15202510$9.65607$6.90582$5.54598 $4.742119.888597.148835.799605.0062410.124517.39688 6.05980 5.2783710.363847.64993 6.326495.5583210.60655 7.90794 6.599565.8459010.85263 8.1708311.10205 8.4385730$4.216044.490454.774155.066855.368226.87887 6.14087 5.677897.16431 6.44301 5.995517.455736.752076.320687.752997.067796.653028.05593 7.389916.9921512.13276 9.55652 8.36440 7.718167.3376512.39857 9.847408.678238.052277.6891312.66758 10.142678.997268.391968.0462312.9397610.442259.321318.736978.4085413.2150710.746059.65022 9.087018.7757213.49350 11.05399 9.98380 9.44182 9.1473911.3659710.32188 9.801139.5232311.35480 8.7110711.61085 8.9882811.87018 9.270127.07.58.08.59.09.510.010.511.0 13.77500PrintDoneT

There is a large number of bank that offers different type of loan. The bank earns interest on the…

The Ruffins are negotiating with two banks for a mortgage to buy a house selling for $145,000. The terms at bank A are a 25% down payment, an interest rate of 10%, a 30-year conventional mortgage, and 3 points to be paid at the time of closing. The terms at bank B are a 15% down payment, an interest rate of 11.0%, a 25-year conventional mortgage, and no points. Which loan should the Ruffins select in order for the total cost of the house to be less? Click the icon to view the table of monthly payments. From which bank should the Ruffins take the loan? O Bank B O Bank A

The Ruffins are negotiating with two banks for a mortgage to buy a house selling for $145,000. The terms at bank A are a 25% down payment, an interest rate of 10%, a 30-year conventional mortgage, and 3 points to be paid at the time of closing. The terms at bank B are a 15% down payment, an interest rate of 11.0%, a 25-year conventional mortgage, and no points. Which loan should the Ruffins select in order for the total cost of the house to be less? Click the icon to view the table of monthly payments. From which bank should the Ruffins take the loan? O Bank B O Bank A

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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The Clarke family is buying a home and will select a mortgage with a 25-year amortization period, at a rate of 6% compounded semiannually for a 5-year term. The monthly mortgage payment will be their only debt payment. The family’s gross monthly income is $8,400. Property taxes are estimated at $500 per month, and heating costs at $375 per month. The bank has upper limits of 39% for GDS and 44% for TDS. What is the maximum mortgage for which the Clarkes qualify?
Kari is purchasing a home for $220,000. The down payment is 25% and the balance will be financed with a 15 year mortgage at 8% and 3 discount points. Kari made a deposit of $30,000 (applied to the down payment) when the sales contract was signed. Kari also has these expenses: credit report, $70; appraisal fee, $120; title insurance premium, 1% of amount financed; title search, $300; and attorney's fees, $500. Find the closing costs (in $).
Tianyang is financing the purchase of a $150,000 home with a $120,000 mortgage. The lender is offering a rate of 5% with 1 point. The point will cost Tianyang A : 1% of $150,000 at the time of the closing. B : 1% of $120,000 over the life of the loan. C : 1% of $150,000 over the life of the loan. D : 1% of $120,000 at the time of the closing.
Phil Pittman is interested in a fixed-rate mortgage for $100,000. He is undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 5.5% for the 15-year mortgage and 6.5% for the 30-year mortgage. a. What are the monthly principal and interest payments for each loan? b. What is the total amount of interest paid on each loan? c. Overall, how much more interest is paid by choosing the 30-year mortgage?
Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 4.5% for the 15-year mortgage and 5% for the 30-year mortgage. (Round your answers to the nearest dollar. Use this table, if necessary.) (a) What are the monthly principal and interest payments (in $) for each loan? 15-year mortgage $ 1530 30-year mortgage $ 1074 (b) What is the total amount of interest (in $) paid on each loan? 15-year mortgage $ _______ ?? 30-year mortgage $ _______??? (c) Overall, how much more interest (in $) is paid by choosing the 30-year mortgage? $
The Fritzes are buying a house that sells for $173,000. The bank is requiring a minimum down payment of 10%. To obtain a 30-year mortgage at 11.5% interest, they must pay 2 points at the time of closing a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 10% down payment. c) Find the cost of 2 points on the mortgage. a) The required down payment is $ b) The mortgage on the property is S c) The cost of the 2 points on the mortgage is $ (Round to the nearest dollar as needed.)
Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 4.5% for the 15-year mortgage and 5% for the 30-year mortgage. (Round your answers to the nearest dollar. Use this table, if necessary.) (a) What are the monthly principal and interest payments (in $) for each loan? 15-year mortgage$ = 30-year mortgage$ = (b) What is the total amount of interest (in $) paid on each loan? 15-year mortgage$ = 30-year mortgage$ = (c) Overall, how much more interest (in $) is paid by choosing the 30-year mortgage? $
Phil Pittman is interested in a fixed-rate mortgage for $400,000. He is undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 4.5% for the 15-year mortgage and 5% for the 30-year mortgage. (Round your answers to the nearest dollar. Use this table, if necessary.) (a) What are the monthly principal and interest payments (in $) for each loan? 15-year mortgage$ 30-year mortgage$ (b) What is the total amount of interest (in $) paid on each loan? 15-year mortgage$ 30-year mortgage$ (c) Overall, how much more interest (in $) is paid by choosing the 30-year mortgage? $ Table 14-1: Monthly Payments to Amortize Principal and Interest per $1,000 Financed Monthly Payments(Necessary to amortize a loan of $1,000) InterestRate (%) 5Years 10Years 15Years 20Years 25Years 30Years 35Years 40Years 3.50 18.19 9.89 7.15 5.80 5.01 4.49 4.13 3.87 3.75 18.30 10.01 7.27 5.93 5.14 4.63 4.28 4.03 4.00 18.42 10.12 7.40 6.06 5.28 4.77 4.43 4.18 4.25 18.53…
Phil Pittman is interested in a fixed-rate mortgage for $400,000. He is undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 4.5% for the 15-year mortgage and 5% for the 30-year mortgage. (Round your answers to the nearest dollar. Use this table, if necessary.) (a) What are the monthly principal and interest payments (in $) for each loan? 15-year mortgage$ 30-year mortgage$ (b) What is the total amount of interest (in $) paid on each loan? 15-year mortgage$ 30-year mortgage$ (c) Overall, how much more interest (in $) is paid by choosing the 30-year mortgage? $
Your monthly mortgage payment (principal plus interest) is $1,500. If you have a 30-year loan with a fixed interest rate of 0.5% per month, how much did you borrow from the bank to purchase your house? Select the closest answer. (a) $154,000 (b) $180,000 (c) $250,000 (d) $300,000 (e) $540,000.
A homeowner is looking to buy a home in Marvin Gardens. The most he can afford to pay in total is $3,080 per month. Yearly property taxes will be about $12,000 (escrowed monthly) and insurance is $187 per month. There are no other costs. If mortgage rates are 5.48% for a 30-year fixed-rate mortgage, how large can his mortgage be? (Do not round intermediate calculations. Round your answer to the nearest whole number.)
A house is selling for $180,000. A deposit of $10,000 was made when the sales contract was signed. The down payment is 25% and the balance will be financed with a 25-year mortgage at 9% and 3 discount points. If the sellers are responsible for the broker's commission (6% of the purchase price); $1,950 in other closing costs; and the existing mortgage with a balance of $60,000; what proceeds will they receive on the sale of the property? $101,850.00 $107,250.00 $112,650.00 O $116,650.00

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