Concept explainers
Evaluating a Loan Request The Nejems found a house selling for $550,000. The taxes on the house are $5634 per year and the insurance is $2325 per year. The Nejems are requesting a conventional loan tom a local bank. The bank requires a 20% down payment and 3 points at the closing. The Nejems are trying to qualify for a 30-year mortgage with an interest rate of 5 5%. Their gross monthly income is $15,375. They have more than 10 monthly payments remaining on a car loan, student loans, and a furniture loan The total of these monthly payments is $995. Their bank will approve a loan that has a total monthly house payment of principal, interest, property taxes, and homeowners’ insurance that is less than or equal to 28% of their adjusted monthly income.
- a. Determine the required down payment.
- b. Determine the cost of the 3 points.
- c. Determine 28% of the Nejems’ adjusted monthly income.
- d. Determine the monthly payment for principal and interest.
- e. Determine their total monthly house payment including insurance and taxes.
- f. Do the Nejems qualify for the loan?
- g. Determine how much of the first mortgage payment is applied to the principal.
- h.
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Chapter 10 Solutions
A Survey of Mathematics with Applications plus MyLab Math Student Access Card -- Access Code Card Package (10th Edition)
Additional Math Textbook Solutions
Pre-Algebra Student Edition
Algebra and Trigonometry (6th Edition)
College Algebra with Modeling & Visualization (5th Edition)
Elementary Statistics (13th Edition)
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