What house value can Betty afford? Betty's annual income is $90,000 and she has monthly credit payments of $500. She is looking for a house financed by 30 year 6% mortgage with 20% down payment. Property tax and insurance on the home is expected to be $300 per month. Calculate the value of the house she can afford.

What house value can Betty afford? Betty's annual income is $90,000 and she has monthly credit payments of $500. She is looking for a house financed by 30 year 6% mortgage with 20% down payment. Property tax and insurance on the home is expected to be $300 per month. Calculate the value of the house she can afford.

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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Seth and Alexandra Moore of Elk Grove Village, Illinois have an annual income of $120,000 and want to buy a home. Currently, mortgage rates are 4.0 percent. The Moores want to take out a mortgage for 30 years. Real estate taxes are estimated to be $5,160 per year for homes similar to what they would like to buy, and homeowner's insurance would be about $1,620 per year. Using a 28 percent front-end ratio, what are the total annual and monthly expenditures for which they would qualify? Round your answers to the nearest dollar. Total annual expenditures $ Monthly expenditures $ Using a 36 percent back-end ratio, what monthly mortgage payment (including taxes and insurance) could they afford given that they have an automobile loan payment of $450, a student loan payment of $350, and credit card payments of $270? (Hint: Subtract these amounts from the total monthly affordable payments for their income to determine the amount left over to spend on a mortgage.) Round your…
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Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
Mary has found a beautiful home on Richmond Rd. that she loves.The price of the home is $285,000. If Mary and George qualify for a30-year loan at a fixed interest rate of 3.99%, can they afford thehome? (Hint: Don't forget about the down payment!)
The McBertys have $20,000 in savings to use as a down payment on a new home. They also have determined that they can afford between $1,500 and $1,800 per month for mortgage payments. If the mortgage rates are 11% per year compounded monthly, what is the price range for houses they should consider for a 30-year loan? (Enter solutions from smallest to largest. Round your answers to the nearest cent.)$ to $
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