Question

Suppose you want to purchase a house. Your take-home pay is $4510$⁢4510 per month, and you...

Suppose you want to purchase a house. Your take-home pay is $4510$⁢4510 per month, and you wish to stay within the recommended guidelines for mortgage amounts by only spending 1414 of your take-home pay on a house payment. You have $19,000$⁢19,000 saved for a down payment and you can get an APR from your bank of 6%6%, compounded monthly. What is the total cost of a house you could afford with a 3030-year mortgage? Round your answer to the nearest cent, if necessary.

Homework Answers

Answer #1

Monthly Loan payment you can afford = $1414

Calculating the Loan amount based on monthly payment you can afford:-

Where, P = Loan amount

r = Periodic Interest rate = 6%/12 = 0.5%

n= no of periods = 30 years*12 = 360

P = $235,843.34

So, Loan amount can take is $235,843.34

Down-payment you have saved = $19,000

Total Cost of House you can afford = $235,843.34 + $19,000

Total Cost of House you can afford = $254,843.34

If you need any clarification, you can ask in comments.    

If you like my answer, then please up-vote as it will be motivating       

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
Katherine and Ryan want to purchase a new house and feel that they can afford a...
Katherine and Ryan want to purchase a new house and feel that they can afford a mortgage payment of $1000 a month for 25 years. They are able to obtain a 6% mortgage (compounded monthly), but must put down 10% of the mortgage value of the house now. Assuming that they have enough savings for the down payment, how expensive of a house can they afford? They can afford a $ house.
1.) You want to buy a house in Hermosa Beach CA, but you can only afford...
1.) You want to buy a house in Hermosa Beach CA, but you can only afford to make monthly payments of $7,100. The interest rate on mortgages right now is 4.25% p.a. with monthly compounding (APR), fixed for 30 years, with monthly payments. You have $155,000 saved to use as a downpayment. What is the most that you can afford to pay for a house (ignoring closing costs, property taxes, etc..)? Answer: $1,598,265.76 2.) Under the same assumptions described in...
purchase of your first home for $600,000. You have just purchased the house and have put...
purchase of your first home for $600,000. You have just purchased the house and have put a 20% down payment, and will borrow the remaining amount.  The 15-year fixed rate loan has an Annual Percentage Rate (APR) of 3.875%.   You will make monthly payments for the life of the loan. Question 12 related to your purchase of your first home for $600,000. You have just purchased the house and have put a 20% down payment, and will borrow the remaining amount.  The 15-year...
Assume that you have found a home for sale and have agreed to a purchase price...
Assume that you have found a home for sale and have agreed to a purchase price of $254800$254800. Down Payment: Assume that you are going to make a 10%10% down payment on the house. Determine the amount of your down payment and the balance to finance. Down Payment=$Down Payment=$ Loan Amount=$Loan Amount=$ Monthly Payment: Calculate the monthly payment for a 30 year loan (rounding to the nearest cent, so rounding to two decimal places). For the 30 year loan use...
Aya and Harumi would like to buy a house and their dream house costs $500,000. They...
Aya and Harumi would like to buy a house and their dream house costs $500,000. They have $50,000 saved up for a down payment but would still need to take out a mortgage loan for the remaining $450,000 and they’re not sure whether they could afford the monthly loan payments. The bank has offered them an interest rate of 4.25%, compounded monthly. How much would they have to be able to afford to pay each month in order to pay...
You decide to buy a house for a total of $242,973. To get a mortgage loan,...
You decide to buy a house for a total of $242,973. To get a mortgage loan, you make a 10% down payment, and the bank will lend you the rest. The interest rate quoted for this loan is 6% APR, and the loan will be paid (and interest compounded) every month, for the next 30 years. How much will you pay in INTEREST on your very first monthly mortgage payment? Enter your answer in dollars, rounded to the nearest cent.
You want to buy your dream house. You currently have $15,000 saved and you need to...
You want to buy your dream house. You currently have $15,000 saved and you need to have a 10% down payment plus an additional 5% of the loan amount for closing costs. Assume the cost of the house is $956,216. You can earn 7.5% per year in a savings account per year. How long will it be before you have enough money for the down payment and closing costs? Given your current credit, you secure a 15-year fixed rate mortgage...
You are planning to purchase a house for $180,000. You will pay 20% down payment and...
You are planning to purchase a house for $180,000. You will pay 20% down payment and take a mortgage loan for the remaining 80%. You could get a 3/1 ARM amortized over 15 years at 3.9 % or a fixed 15 year FRM loan at 5.3%. The expected interest rate of the ARM from years 4 to 5 is 7.5%. You will live in the house for five years, and after that you expect to sell the house for $200,000...
You want to finance your new home with a 15 year fixed rate mortgage. The APR...
You want to finance your new home with a 15 year fixed rate mortgage. The APR is 4%. You know the maximum monthly payment you can afford is $2550. What is the maximum amount of mortgage loan you can take out? (Hint: you need to figure which TVM element you need to calculate here) You must round up your answer to integer. (For example, if you answer is 530035.67, you must write 530036)
Suppose you plan to purchase a house. You add up all your current monthly expenses and...
Suppose you plan to purchase a house. You add up all your current monthly expenses and subtract them from your monthly net salary and discover a $1,500 surplus. You also have $40,000 in a savings account accruing interest at a 2.50% rate. You deposit your surplus of $1,500 each month for a year before purchasing a house. You apply for a 30 year mortgage and get approved for $500,000 at a 2.7% interest rate. You are unsure if you can...