You wish to qualify for a $200,000 mortgage. Your monthly payment (principal and interest) must not...

You wish to qualify for a $200,000 mortgage. Your monthly payment (principal and interest) must not exceed 25% of your monthly income. Your monthly payment plus taxes and homeowner’s insurance must not exceed 28% of your monthly income. Your monthly payment, taxes, insurance, and other debt payments must not exceed 33% of your monthly income. The loan is for 30 years. Interest rates for these loans are 7%. Taxes and insurance are $250 per month and you have a $300 car payment. Which of the following best describes how high your monthly income needs to be for you to qualify?

Please just tell me how to calculate monthly principal payment and monthly interest payment on average. I already know how to do the rest.

Expert Solution

interest rate	7%
loan amount	200000
number of payment made	12	in a year

you can calculate interest paid =	loan principal * (interest rate/number of payments)
so interest payment	1166.667

new principal balances=	Principal-(repayment-interest)
once you get new balance, use the same formula of interest to calculate interest amount, then subtract it from EMI.
subtract whole amount from new balance to get the balance at end of period 2

Using this way you can calculate the principal and interest for each month

jeff jeffy answered 3 years ago

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