1.      Eric is buying a house selling for $130,000. The bank is requiring a minimum down payment of 25%. The current mortgage rate is 9%.

a) Determine the amount of the required down payment.32500

b) Determine the monthly mortgage payment for a 35-year loan with a minimum down payment.764.39

c) What is the cost of three points on the mortgage determined in part (b)?2925

2. Marion's gross monthly income is $2500. He has 12 remaining payments of $95 on furniture and appliances. The taxes and fire insurance on the house are $105 per month.

a)  What maximum monthly payment does the bank feel that Marion can afford? 601.25

b) Marion would like to get a 30-year, $52,200 mortgage. Does he qualify for this mortgage with a 9% interest rate?420.01+105<601.25

3. Andrea obtains a 30-year, $56,250 conventional mortgage at 8.5% on a house selling for $75,000. Her monthly mortgage payment is $432.56.

a) Determine the total amount Andrea will pay for her house.174471.6

b) How much of the cost will be interest?99471.6

c) How much of the first payment on the mortgage is applied to the principal?34.12

4. The Washingtons found a house that is selling for $113,500. The taxes on the house are $1200 per year, and the fire insurance is $320 per year. They are requesting a conventional loan from the local bank. The bank is currently requiring a 25% down payment, three points, and the interest rate is 10%. The Washingtons' monthly income is $4750 and they have $40,000 in a savings account. They have more than 6 monthly payments remaining on a car, a boat, and furniture. The total monthly payment for these items is $420. .  The closing costs besides down payment and points runs $6000.

a) Determine the required down payment.28375

b) Determine the cost of the three points.2553.75

c) Determine their adjusted monthly income.4330

d) Determine the maximum monthly payment the bank feels that they can afford.1082.5

e) Determine the monthly mortgage payment for a 20-year loan.821.47

f) Determine their total monthly payment, including insurance and taxes.948.14  

g) Determine whether the Washingtons qualify for the 20-year loan.948.14<1082.5;40000>36928.75

h) Determine how much of the first payment on the loan is applied to the principal.112.1

i) Find the balance of the loan after 15 years.38665.05

5. The Christophers are negotiating with two banks for a mortgage to buy a house selling for $ 105,000. The terms at bank A are a 10% down payment, an interest rate of 10%, a 30-year conventional mortgage, and three points to be paid at the time of closing. The terms at bank B are a 20°/c down payment, an interest rate of 11.5%, a 25-year conventional mortgage and no points. Which loan should the Christophers select in order for the total cost of the house to be less?311886.6;277149