Michelle Duncan wants to know what price home she can afford. Her annual gross income is $52,200. She owes $760 per month on other debts and expects her property taxes and homeowners insurance to cost $250 per month. She knows she can get an 6.00%, 30-year mortgage so her mortgage payment factor is 6.00. She expects to make a 20% down payment. What is Michelle's affordable home purchase price?
Solved
Show answers
More tips
- F Family and Home Parents or Environment: Who Has the Most Influence on a Child s Upbringing?...
- P Philosophy Unbelievable stories of encounters with otherworldly forces...
- L Leisure and Entertainment How to Choose the Perfect Gift for Men on February 23rd?...
- H Health and Medicine How to Treat Whooping Cough in Children?...
- H Health and Medicine Simple Ways to Lower Cholesterol in the Blood: Tips and Tricks...
- O Other How to Choose the Best Answer to Your Question on The Grand Question ?...
- L Leisure and Entertainment History of International Women s Day: When Did the Celebration of March 8th Begin?...
- S Style and Beauty Intimate Haircut: The Reasons, Popularity, and Risks...
- A Art and Culture When Will Eurovision 2011 Take Place?...
- S Style and Beauty How to Choose the Perfect Hair Straightener?...
Answers on questions: Business
- B Business Amortization schedule with periodic payments. Moulton Motors is advertising the following deal on a used Honda Accord: Monthly payments of $ for the next months and this...
- B Business Andrew’s company uses a special email program for communicating within the organization. What should the company do to ensure that its employees are able to access the inbox...
- B Business This chapter described various situations that emphasize the need for controls. In the first sce- nario presented, a furniture store sells merchandise on credit. Based on...
- B Business A bank is negotiating a loan. The loan can either be paid off as a lump sum of $80,000 at the end of four years, or as equal annual payments at the end of each of the next...
- B Business In the current year, Bruno Corporation collected rent of $3,600,000. For income tax reporting, the rent is taxed when collected. For financial reporting, the rent is recognized...
- B Business Situational leadership theories grew out of an attempt to explain the inconsistent findings about traits and styles. Situational theories propose that the effectiveness of...
- B Business A stock is currently selling at 80 per share to yield an annual nominal interest rate of 10%, compounded semi-annually. The stock is expected to pay dividends at the end of...
- M Mathematics Find the amount or annuity of 10,00 paid yearly for three years at 8% per anum...
- C Computers and Technology Rate 1-10⇒⇒⇒ Rate Rate Rate Rate Rate Rate Rate Rate...
- B Biology Numărul nucleatidelor cu tiamina conținut de fragmentul Adn bicatenar...
Ответ:
Affordable home purchase price of Michelle Duncan is $133,958.
Explanation:
Determine the monthly gross income (annual income divided by 12).
$52,200/12 = $4,350
With a down payment of at least 3.5 percent, lenders use 33 percent
of monthly gross income as a guideline for PITI (principal, interest,
taxes, and insurance) and 38 percent of monthly gross income as a
guideline for PITI plus other debt payments.
4350 * 0.38 = $1,653
Subtract other debt payments and monthly costs of property taxes and homeowner’s insurance.
$1,653 - 760 - 250 = $643
Divide this amount by the monthly mortgage payment per $1,000 based on current mortgage rates
($643/6.00) x $1,000 = $107,166
Divide your affordable mortgage amount by 1 minus the fractional portion of the down payment
$107,166/(1 - 0.2) = $133,958
Affordable home purchase price of Michelle Duncan is $133,958.
Ответ: