J and R arrived home after visiting colleges for the third weekend in a row with their triplet. They are considering state university or community college. Triplets are leaning towards state university which will help in tuition fees but that is a two hour car drive away. Due to the distance between home and college they are considering to buy a condominium near the college. They are trying to figure out whether this decision will be good or not. Eventually they decided to meet with financial planner JH and real estate broker AH as they are unfamiliar with the real estate investment opportunities. Character in this case: J and R. Adequate information: Checking account: $5,000 Savings account: $47,000 Emergency fund savings account: $40,000 House: $475,000 IRA balance: $85,000 Life insurance cash value: $125,000 Investments (stocks, bonds): $700,000 Car: $14,500 (J) and $18,000 (R) J: $45,000 gross income ($31,500 net income after taxes) R: $135,000 gross income ($97,200 net income after taxes) Mortgage: $1,225 Property taxes: $500 Homeowner’s insurance: $300 IRA contribution: $300 Utilities: $250 Mortgage balance: $47,000 Credit card balance: $0 Car loans: $0 Food: $600 Gas/maintenance: $275 Entertainment: $300 Life insurance: $375 To determine: Financial benefits for J and R if they decide to purchase the house.

Question

Want to see the full answer?

Answer 1

Question

Chapter 17, Problem 3CC

Summary Introduction

Case summary:

J and R arrived home after visiting colleges for the third weekend in a row with their triplet. They are considering state university or community college. Triplets are leaning towards state university which will help in tuition fees but that is a two hour car drive away. Due to the distance between home and college they are considering to buy a condominium near the college. They are trying to figure out whether this decision will be good or not. Eventually they decided to meet with financial planner JH and real estate broker AH as they are unfamiliar with the real estate investment opportunities.

Character in this case: J and R.

Adequate information:

Checking account: $5,000

Savings account: $47,000

Emergency fund savings account: $40,000

House: $475,000

IRA balance: $85,000

Life insurance cash value: $125,000

Investments (stocks, bonds): $700,000

Car: $14,500 (J) and $18,000 (R)

J: $45,000 gross income ($31,500 net income after taxes)

R: $135,000 gross income ($97,200 net income after taxes)

Mortgage: $1,225

Property taxes: $500

Homeowner’s insurance: $300

IRA contribution: $300

Utilities: $250

Mortgage balance: $47,000

Credit card balance: $0

Car loans: $0

Food: $600

Gas/maintenance: $275

Entertainment: $300

Life insurance: $375

To determine:

Financial benefits for J and R if they decide to purchase the house.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

4. On August 20, Mr. and Mrs. Cleaver decided to buy a property from Mr. and Mrs. Ward for $105,000. On August 30, Mr. and Mrs. Cleaver obtained a loan commitment from OKAY National Bank for an $84,000 conventional loan at 5 percent for 30 years. The lender informs Mr. and Mrs. Cleaver that a $2,100 loan origination fee will be required to obtain the loan. The loan closing is to take place September 22. In addition, escrow accounts will be required for all prorated property taxes and hazard insurance; however, no mortgage insurance is necessary. The buyer will also pay a full year's premium for hazard insurance to Rock of Gibraltar Insurance Company. A breakdown of expected settlement costs, provided by OKAY National Bank when Mr. and Mrs. Cleaver inspect the uniform settlement statement as required under RESPA on September 21, is as follows: I. Transactions between buyer-borrower and third parties: a. Recording fees--mortgage b. Real estate transfer tax c. Recording fees/document…

Hello tutor give correct answer

Need assistance urgently by the expert. Fake answers will be rate as unhelpful.