Question
In: Finance
You are saving for the down payment on a house. The houses in the area you...
You are saving for the down payment on a house. The houses in the area you prefer have an average selling price of $450,000 and you need a 10% down payment to ensure your mortgage payments are not too high. You have $30,000 saved that you can invest today at 6.5% (annual compounding).
a) How long before you will have enough for the down payment saved?
b) You want to buy the house sooner. In addition to the $30,000 saved to date, how much would you need to invest each month (into the same investment) in order to have enough for the down payment in 2 years?
c) What would your payments be for part (b) if you made them at the beginning of the month instead of the end?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Luke and Amy are saving for the down payment on a house. The houses in the...
Luke and Amy are saving for the down payment on a house. The
houses in the area they prefer have an average selling price of
$450,000 and they need a 10% down payment to ensure their mortgage
payments are not too high. They have $30,000 saved that they can
invest today at 6.5% (annual compounding).
a) How long before they will have enough for the down payment
saved?
b) They want to buy the house sooner. In addition to
the $30,000...
You are ready to buy a house and you have $50,000 for a down payment and...
You are ready to buy a house and you have $50,000 for a down
payment and closing costs. Closing costs are estimated to be 2.5%
of the loan value. You have an annual salary of
$200,000. The bank is willing to allow your housing costs –
mortgage, property tax and homeowners insurance to be equal to 28%
of your monthly income. You have estimated that property tax will
be $1,000/month and homeowner’s insurance will be $100/month. The
interest rate on...
You are ready to buy a house and you have $50,000 for a down payment and...
You are ready to buy a house and you have $50,000 for a down
payment and closing costs. Closing costs are estimated to be 2.5%
of the loan value. You have an annual salary of
$200,000. The bank is willing to allow your housing costs –
mortgage, property tax and homeowners insurance to be equal to 28%
of your monthly income. You have estimated that property tax will
be $1,000/month and homeowner’s insurance will be $100/month. The
interest rate on...
You are ready to buy a house, and you have $25,000 for a down payment and...
You are ready to buy a house, and you have $25,000 for a down
payment and closing costs. Closing costs are estimated to be 4% of
the loan value. You have an annual salary of $48,000 (monthly
income $4000) , and the bank is willing to allow your monthly
mortgage payment to be equal to 25% of your monthly income. The
interest rate on the loan is 7.2% per year with monthly compounding
(.6% per month) for a 30-year fixed...
You are ready to buy a house and you have $50,000 for a down payment and...
You are ready to buy a house and you have $50,000 for a down
payment and closing costs. Closing costs are estimated to be 2.5%
of the loan value. You have an annual salary of
$200,000. The bank is willing to allow your housing costs –
mortgage, property tax and homeowners insurance to be equal to 28%
of your monthly income. You have estimated that property tax will
be $1,000/month and homeowner’s insurance will be $100/month. The
interest rate on...
You are ready to buy a house and you have $85,000 for a down payment and...
You are ready to buy a house and you have $85,000 for a down
payment and closing costs. Closing costs are estimated to be 3.5%
of the loan value. You have an annual salary of $125,000. The bank
is willing to allow your monthly mortgage payment to be equal to
28% of your monthly income. The interest rate on the loan is 4.5%
per year with monthly compounding for a 30-year fixed rate loan.
How much money will the bank...
You are ready to buy a house and you have $85,000 for a down payment and...
You are ready to buy a house and you have $85,000 for a down
payment and closing costs. Closing costs are estimated to be 3.5%
of the loan value. You have an annual salary of
$125,000. The bank is willing to allow your monthly mortgage
payment to be equal to 28% of your monthly income. The
interest rate on the loan is 4.5% per year with monthly compounding
for a 30-year fixed rate loan.
How much money will the bank...
Suppose you want to accumulate $9,365.60 for a down payment for a house. You will deposit...
Suppose you want to accumulate $9,365.60 for a down payment for
a house. You will deposit $400 at the ending of every 2 months in
an account that credits interest every 2 months at the rate of 18%
per annum. How long will it take you to achieve your goal?
if you are buying a house valued at $210,000 with 10% down payment. You will borrow...
if
you are buying a house valued at $210,000 with 10% down payment.
You will borrow the remaininf 90% of the purchase prices at 6% APR
and the loan will be paid off in 30 years, how much do you still
owe two months from now?
You would like to buy a house and will need a down payment of $19,367 in...
You would like to buy a house and will need a down payment of
$19,367 in 8 months. How much would you have to invest, each month,
starting next month, for 8 months to exactly pay for the down
payment if your investments earn 2.58% APR compounded monthly?
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