Loan Project: Buying a House
For this assignment, you will apply some formulas from Chapter 3 for the situation
when you take a mortgage loan to buy a house.
1. Find on internet on any Real Estate website house for sale you would like to buy.
Post
house description,
price of the house
picture of the house
2. Find online a current market interest rate for a 30-year fixed-rate mortgage
having a down payment of 20 percent of the purchase price.
3. Compute
the down payment (20% of the house price)
amount financed and
the monthly mortgage payment for 30 years mortgage
(use formulas from Chapter 3).
4. Suppose rules of the bank are, that in order to qualify for the loan, your monthly
mortgage payment cannot exceed 30 percent of your monthly income.
What should be your minimum monthly income needed to qualify for the loan?
What is the minimum annual income needed to qualify for the loan?
5. Assuming that the mortgage is held for the full 30 years (360 payments),
compute the total amount you will pay for this house
how much will be interest paid for your loan?
Submit your project as an attached file
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