10.5 Buying a House With a Mortgage 639 a) Determine the amount of the required down payment. $33,000 b) Determine the amount of the mortgage. $132,000 c) Determine the monthly payment for principal and interest. $771.66 21. Buying a Brownstone Townhouse Phillip is purchasing a brownstone townhouse in Boston for $2,337,500. To obtain the mortgage, Phillip is required to make a 20% down payment. Phillip obtains a 20-year mortgage with an interest rate of 4.5%. a) Determine the amount of the required down payment. $467,500 b) Determine the amount of the mortgage. $1,870,000 c) Determine the monthly payment for principal and interest. $11,830.54 22. Buying a First House The Firszts are purchasing their first home for $199,900. They are obtaining an FHA mortgage through their credit union and are required to make a 3% down payment. They obtain a 30-year mortgage with an interest rate of 4.5%. a) Determine the amount of the required down payment. $5997 b) Determine the amount of the mortgage. $193,903 c) Determine the monthly payment for principal and interest. $982.48 23. Qualifying for a Mortgage The Guenthers’ gross monthly income is $3200. They have 25 remaining car payments of $335. The Guenthers are applying for a 15-year, $150,000 mortgage at 5% interest to buy a new house. The taxes and insurance on the house total $225 per month. Their credit union will approve a loan that has a total monthly house payment of principal, interest, property taxes, and homeowners’ insurance that is less than or equal to 28% of their adjusted monthly income. a) Determine 28% of the Guenthers’ adjusted monthly income. $802.20 b) Determine the Guenthers’ total monthly house payment, including principal, interest, taxes, and homeowners’ insurance. $1411.19 c) Do the Guenthers qualify for this mortgage? No 24. Qualifying for a Mortgage The Zhengs’ gross monthly income is $4100. They have 18 remaining boat payments of $505. The Zhengs are applying for a 20-year, $275,000 mortgage at a 9% interest rate to buy a new house. The taxes and insurance on the house total $425 per month. Their bank will approve a loan that has a total monthly house payment of principal, interest, property taxes, and homeowners’ insurance that is less than or equal to 28% of their adjusted monthly income. a) Determine 28% of the Zhengs’ adjusted monthly income. $1006.60 b) Determine the Zhengs’ total monthly house payment, including principal, interest, taxes, and insurance. $2899.25 c) Do the Zhengs qualify for this mortgage? No 25. A 15-Year Conventional Mortgage Ingrid obtains a 15-year, $63,750 conventional mortgage at a 6.5% rate on a house selling for $75,000. Her monthly payment, including principal and interest, is $555.33. She pays 0 points. a) Determine the total amount Ingrid will pay for her house. $111,209.40 b) How much of the cost will be interest? $36,209.40 c) How much of the first payment on the mortgage is applied to the principal? $210.02 26. A 25-Year Conventional Mortgage The Bells obtain a 25-year, $110,000 conventional mortgage at a 5.5% rate on a house selling for $160,000. Their monthly mortgage payment, including principal and interest, is $675.50. They also pay 2 points at closing. a) Determine the total amount the Bells will pay for their house. $254,850 b) How much of the cost will be interest (including the 2 points)? $94,850 c) How much of the first payment on the mortgage is applied to the principal? $171.33 27. An Adjustable Rate Mortgage The Bhatts purchased a new home for $235,000 with a down payment of $47,000. They obtained a 20-year adjustable rate mortgage with the following terms. The interest rate is based on the one-year Treasury bill rate, which is currently at 1.5%, and the add-on rate, which is 2.5%. The initial rate period is 5 years, and thereafter the Rene Frederick/Stockbyte/ Getty Images Andy Dean Photography/ Shutterstock
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