Question

3. Laurie has been renting an apartment for a few years and is considering buying a...

3. Laurie has been renting an apartment for a few years and is considering buying a house. Her gross annual income is $48 000. Laurie finds a house she likes, with a cost of $145 000. She has saved up enough money to cover the closing costs plus an additional $25 000 for a down-payment.

b) The mortgage is amortized over 25 years, with an interest rate of 7.25% /a, compounded semi-annually. Use the TVM Solver to determine Laurie’s monthly mortgage payments. c) The annual taxes on the house are 1.35% of its value. Determine the amount of taxes Laurie must pay monthly. d) The previous owner of the house calculated that the annual heating expenses were $1200. Laurie still has a monthly student loan of $150 and a monthly car payment of $400. Determine Laurie’s Gross Debt Service and Total Debt Service ratios. Based on these values, comment on the affordability of this house N= I%= PV= PMT= FV= P/Y= C/Y=

Homework Answers

Answer #1

Please give positive rating your feedback is valuable to me.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Develop a spreadsheet model to determine how much a person or a couple can afford to...
Develop a spreadsheet model to determine how much a person or a couple can afford to spend on a house. Lender guidelines suggest that the allowable monthly housing expenditure should be no more than 28% of monthly gross income. From this, you must subtract total nonmortgage housing expenses, which would include insurance and property taxes and any other additional expenses. This defines the affordable monthly mortgage payment. In addition, guidelines also suggest that total affordable monthly debt payments, including housing...
Five years have passed and Jamie Lee, 34, is considering taking the plunge--not only is she...
Five years have passed and Jamie Lee, 34, is considering taking the plunge--not only is she engaged to be married, but she is also deciding on whether to purchase a new home. Jamie Lee’s cupcake café is a success! It has been open for over a year now and has earned itself rave reviews in the local press and from its regular customers who just cannot get enough of her delicious varieties of cupcakes. One such customer, who stopped by...
Karen’s bank just called as she submitted a bank application for a mortgage. Karen’s gross annual...
Karen’s bank just called as she submitted a bank application for a mortgage. Karen’s gross annual income is $120,000. Her monthly heating would be $375, condo fees of $650 per month, and annual property taxes would be $4,550 along with monthly car payments of $780 and other monthly debt payments of $420. Given the bank has calculated her Total Debt Service (TDS) ratio as 39%, how much is her monthly mortgage payment?
The Marco family — comprising Mrs. Marco aged 40, Mr. Marco, aged 3 9 , and...
The Marco family — comprising Mrs. Marco aged 40, Mr. Marco, aged 3 9 , and their three young children — relocated to Barcelona in January 2020 when Mrs. Marco received a job offer from a n international firm . They rented a three - bedroom condominium in Barcelona for 2. 1 00€ per month, which included parking and fees. While renting made life easy, the Marc o family began weighing the pros and cons of purchasing a flat, in...
1)You want to buy a house and wonder what you can afford. Banks look at collateral,...
1)You want to buy a house and wonder what you can afford. Banks look at collateral, creditworthiness and capacity (ability to pay) when making loans. Assume you have sufficient down payment and credit score. Your bank has a requirement of 28% housing expense ratio and your gross annual income is $69,000. Based on those assumptions, how much can you afford to pay in total housing costs each month? 2) You are looking to purchase a new home that is listed...
1. You are currently considering buying a new car. The price is $ 15,000 and you...
1. You are currently considering buying a new car. The price is $ 15,000 and you have $ 2,000 for the soon. If you can negotiate a rate of 10% and want to pay for the car in a period of five years. How much would the payment be? 2. Ruiz Motor is financing a new truck with a loan of $ 10,000 to be repaid in five installments of $ 2,504.56 to be made at the end of the...
PLEASE ANSWER C!!! Bob & Betty Homebuyers want to make an offer on this property at...
PLEASE ANSWER C!!! Bob & Betty Homebuyers want to make an offer on this property at the list price. Bob earns $48,000 per year and Betty earns $54,000 per year. They have very good credit. Their monthly payments are $200 for student loans, $350 for their car payment and minimum credit card payment of $50. They have savings of $125,000. The balance of their student loans is $40,000. Insurance on this house will cost them $900 per year. Property taxes...
During the last few years, Jana Industries has been too constrained by the high cost
of...
During the last few years, Jana Industries has been too constrained by the high cost
of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice president. Your first task is to estimate Jana’s cost of capital. Jones has provided you with the following data, which she...
1. For the next 6 years, you pan to make equal quarterly deposits of $600.00 into...
1. For the next 6 years, you pan to make equal quarterly deposits of $600.00 into an account paying 8% compounded quarterly. How much will be the total you have at the end of the time? 2. How much money will you have to deposit now if you wish to have $5,000 at the end of 8 years. Interest is to be at the rate of 6% compounded semiannually? 3. In the California “Million Dollar Lottery” a winner is paid...
  The following balance sheet and income statement should be used for questions #1 through #6: Kuipers,...
  The following balance sheet and income statement should be used for questions #1 through #6: Kuipers, Inc. 2001 Income Statement (OMR in millions) Net sales 9,625 Less: Cost of goods sold 5,225 Less: Depreciation 1,890 Earnings before interest and taxes 2,510 Less: Interest paid 850 Taxable income 1,660 Less: Taxes 581 Net income 1,079 Addition to retained earnings 679 Dividends paid 400 Kuipers, Inc. 12/31/00 and 12/31/01 Balance Sheet (in OMR, in millions) 2000 2001 2000 2001 Cash 1,455 260...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT