Question

1. Calculate how much money a prospective homeowner would need for closing costs on a house that costs $117,100. Calculate based on a 15 percent down payment, 1.8 discount points on the loan, a 1.1 point one origination fee, and $1,320 in other fees.

The closing cost would be $:

2. Determine the maximum​ 30-year fixed-rate mortgage amount for which a couple could qualify if the rate is 6.68 percent. Assume they have other debt payments totaling $439 per month and a combined annual income of $70,700. Monthly escrow payments for real estate taxes and​ homeowner's insurance are estimated to be $245. (Assume a 36 percent maximum of annual income for total debt and escrow​ payments.)

The maximum​ 30-year fixed-rate mortgage amount for which a couple could qualify if the rate is 6.68% is $?

Answer 1

ANS.

here,home cost is $117,100

       15 percent down payment = $117,100*0.15

                                          = $17565

1.8 discount points on the loan = $117,100*0.018

                                               = $2107.8

     1.1 point one origination fee = 0.011*$117,100

                                               = $1288.1

                            other fees = $1,320

                             so total cost = $17565 + $2107.8 + $1288.1 + $1,320

                                                = $22280.9

(2)

debt payment allowed = 70700*.0.36

                                 = 25452

monthly debt Payment = 25452/12

                                  = 2121

           monthely debt. = 439+245 = 684

Monthly Debt allowed for home mortgage payment = 2121-684 = 1437

PV =

here, i= 0.0668/12

       n= 30*12 = 360

       C= 1437

PV = $223171.6909

HENCE, We get a maximum mortage of $223171.6909

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