[Get Answer ]-Business Math 8 1

/in /by

Question Description

joe has decided that he is tired of paying rent and not building equity of his own. he thinks that he is ready to assume the responsibility of owning a home and has found what he believes is the perfect first home. joe meets with the loan officer at his bank where the process of buying a home is started. the loan officer provides joe with a great deal of information, leaving him excited and apprehensive at the same time.<?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />

what you know:

Get Your Custom Essay Written From Scratch

We have worked on a similar problem. If you need help click order now button and submit your assignment instructions.

Get Answer Over WhatsApp Order Paper Now

Just from $13/Page

·         the purchase price of the house is $75,000.

·         joe has $10,000 in savings.

·         joe makes $15 per hour and works 40 hours per week.

·         30-year mortgage interest rate of 6.25% and a monthly payment of $439.00

·         15-year mortgage interest rate of 5.25% and a monthly payment of $575.00

·         down payment: 5% minimum

·         taxes last year were $375.

·         insurance is $250 per year.

what you are looking for:

1.          can joe afford the monthly payments with taxes and insurance for either a 30 or 15 year mortgage?

2.          if joe buys the house, will he have enough money left over on a monthly basis to live comfortably?

3.          does joe have enough in savings to pay for the down payment and all of the closing costs?

 

solution plan:

complete the following questions based upon the information in the video and other information provided in the worksheet.

1.          joe figures that with overtime he will average 40 hours a week for 52 weeks a year. if his current wage is $15.00 per hour, how much will he make per year?

2.          how much would joe’s wages be in an average month?

3.          based upon the information in the video, joe has a car payment of $249 per month. the average utilities are: electricity, $79; gas, $49; water, sewer, and trash, $27. in addition, joe is saving $100 per month. how much of his monthly salary would be committed to utilities and other expenses?

4.          if joe’s net income after taxes each month is equal to 74% of his gross wages, how much is his net income?

5.          joe’s total monthly payment to the bank will consist of the mortgage interest plus principal amount plus monthly payments for insurance and taxes. what will the total monthly payments be for a 15-year and a 30-year loan including taxes and insurance?

6.          after paying for his car, utilities, and a 15-year mortgage payment how much will he have left to cover other living expenses? if he goes with a 30-year mortgage, how much will he have left over to cover living expenses?

7.          make a list of your living expenses and try to estimate monthly expenses. does joe have enough left over to live comfortably if he buys the house? should he go with the 15 or the 30-year mortgage?

8.          complete the good faith estimate to see if joe has enough money in savings for the down payment and closing costs:

description of fee

amount of fee

extended amount

down payment

5% of purchase price

loan origination fee

no fee at this bank

points

no points on this loan

appraisal fee

$400

credit report

$50

insurance—first year premium

$250

mortgage insurance

$45 (one month)

escrow account insurance reserve

insurance for two months ($250 / 12) * 2

escrow account tax reserve

property taxes for two months($375 / 12) * 2

attorney fees

buyer’s choice. none here.

title insurance

$700

processing/underwriting

$100

document preparation and recording fees

$250

survey

$125

tax service

$50

flood certification

$20

title co. fee

$150

pre-paid interest

depends on closing date: estimate $150.00

total due at closing:

 
what is your conclusion? summarize your findings.

Needs help with similar assignment?

We are available 24x7 to deliver the best services and assignment ready within 3-4 hours? Order a custom-written, plagiarism-free paper

Get Answer Over WhatsApp Order Paper Now