Your annual income is $75,000 and you have $53,000 cash to cover down payment and closing cost of buying a house. You are looking at a house priced at $300,000 with monthly real estate tax and insurance cost amounting to $375. The lender will accept a down payment of 15% and the mortgage rate is 5%. You have the funds to cover the estimated closing cost of $6500 and down payment. You have no other debt. Given the costs associated with the purchase of the above house and the mortgage rate, will you be able to take a 30-year mortgage under rule 28 to finance the purchase of this house with your income? What would be the highest house value you can afford with your income if the costs associated with the purchase are the same as in (a)?

Your annual income is $75,000 and you have $53,000 cash to cover down payment and closing cost of buying a house. You are looking at a house priced at $300,000 with monthly real estate tax and insurance cost amounting to $375. The lender will accept a down payment of 15% and the mortgage rate is 5%. You have the funds to cover the estimated closing cost of $6500 and down payment. You have no other debt. Given the costs associated with the purchase of the above house and the mortgage rate, will you be able to take a 30-year mortgage under rule 28 to finance the purchase of this house with your income? What would be the highest house value you can afford with your income if the costs associated with the purchase are the same as in (a)?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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