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Suppose Calvin Cordozar Broadus, Jr. (aka Snoop Doggy Dogg) is considering moving his family to Manhattan. His real estate agent has managed to locate a penthouse apartment that overlooks Central Park for $2.4 million. He will have $2.1 million from the sale of his current home as a down payment. Snoop would like to finance the remainder of the cost and his banker has presented two options: a 30-year fixed-rate mortgage at 8% or a 20-year fixed-rate mortgage at 7.5%.
Determine the monthly mortgage payment for the 30-year loan.
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- An investor plans to purchase a 2-bedroom condo in San Francisco. The price of the property is $300,000. She will have a 15-year 3% APR mortgage with a 20% down payment. The investor will keep the condo in the next 15 years and lease the condo. Suppose the rent collected by the renter will just cover the mortgage payment and other expenses (e.g., condo fee, tax, maintenance). In other words, in- and out- cash flows just cancelled out. The value of the house is expected to inflate by 50%. What is the monthly return to the investor? Group of answer choices 14.377% 1.198% 1.126% 13.508%Josh is taking out a mortgage for $161,000 to buy a new house and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the mortgage loan, and by how much. (a) His credit union has offered him a 40-year mortgage loan at an annual interest rate of 4.1%. Find the monthly payment. (b) A bank has offered him a 15-year mortgage loan at an annual interest rate of 3.8%. Find the monthly payment. (c) Suppose Josh pays the monthly payment each month for the full term. Which lender's mortgage loan would have the lowest total amount to pay off, and by how much? • Credit union The total amount paid would be $____ less than to the bank. • Bank The total amount paid would be $____ less than to the credit union.You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 15-year mortgage at 3.25% annual interest rate for the cost of the house after they receive a 20% down payment. At the end of the 15-years, how much total money will you have paid to Bank of America for your home? In another word how much did the $415,000.00 house really cost the couple?
- Pierre is deciding whether he should rent or buy a house. Assuming that renting an apartment will cost of him $1,500 per month and the mortgage on a house is $3,500 per month. If he rents, he considers investing the difference between monthly rental cost and mortgage cost in a Balanced Fund earning 8% per year. If the house he purchases in Oshawa, Ontario costs about $800,000 and he intends on paying off the mortgage after 25 years. If he decides to sell the house in 25 years and the house appreciates at a rate of 4% per year: Question 1 What would be the better outcome, renting or buying and by how much? (Show your work and include all financial calculators) Calculate the investment value of renting versus home ownership. Question 2 Based on your answer in Question 1, what factors would make you change your mind and choose the other. List a minimum of 3 reasons or factors and elaborate as to why.Tom wishes to purchase a property that's been valued at $400,000. He has 15% of this amount available as a cash deposit and will require a mortgage for the remaining amount. The bank offers him a 15-year mortgage at 2.5% interest. Calculate the total interest Tom will pay over the lifetime of the loan. Round your answer to the nearest dollar. Do not rould until you have calculated the final answer.Joe wants to own a home in the future. He asks you describe an advantages and disadvantage of a FRM versus an ARM. He then asks you to describe the advantages and disadvantages of a 15-year loan versus a 30-year loan. He also wants to know how the portion of the home payment that comprises interest changes over the years assuming he takes out an FRM. Is there anything he can do to reduce the total amount he’ll pay for the home? What else would be added to his monthly mortgage payment? What are three benefits of home ownership? What are three benefits of renting?
- A couple who wants to purchase a home with a price of $340,000 has $100,000 for a down payment. If they can get a 25-year mortgage at 6% per year on the unpaid balance, find each of the following. (a) What will be their monthly payments? (b) What is the total amount they will pay before they own the house outright? (c) How much interest will they pay over the life of the loan? (a) Their monthly payments would be approximately $ (Do not round until the final answer. Then round to the nearest hundredth as needed.) (b) They will pay a total amount of approximately $ before they own the house outright. (Use the answer from part a to find this answer. Round to the nearest hundredth as needed.) (c) The total interest is approximately $ (Use the answer from part b to find this answer. Round to the nearest hundredth as needed.)The Jacksons are considering selling their current residence, buying a small home near Avery’s parents for $220,000 with a $100,000 30-year mortgage at 3.5%, and investing the net proceeds in their retirement accounts and education accounts. They assume they will incur 2% in transaction costs for the purchase and 6% for the sale. They have asked you the following: What will be their payment (principal and interest only) on their new home? How much will they be able to invest in their retirement accounts and education accounts after selling the old house and buying the new house? If the Jacksons purchase the new house one year from today, what will be the balance on their mortgage when they retire? What is the income tax consequence of their sale and purchase strategy?. Josiah is considering using his lottery winnings of $900,000 to buy a house. He nust first pay off an existing debt of $300,000. The house is currently worth $700,000 and Josiah is willing to make a down payment of 35% of what is left of his lottery winnings, after he pays his debt of $300,000. He plans to apply for a 25 year mortgage at 5.0%, compounded monthly: a. What size mortgage would Josiah have to borrow to pay off the rest of his new house? b. Find the amount of his monthly mortgage payments c. Find the Total amount of Interest Josiah will pay to the bank, after 25 years.
- Carl and Melissa have a monthly income of $6000. They want to buy a house for $200,000 and make a down payment of $40,000. The monthly payment on a 15-year mortgage will be $2,000. On a 30-year mortgage, the monthly payment will be $1,350. Which of the following would you recommend? Why?The Bainter family is moving to a new town and needs a place to live. The Bainters are considering renting or purchasing a home and have found a suitable option for each option. • The home for sale is listed at $150,000.00. They have $30,000.00 for a down payment and are qualified for a fixed rate 30-year mortgage with an annual interest rate of 4.2%. • The rental home is currently $900.00 per month, with rent expected to increase approximately $75.00 every 4 years. 1. Calculate the monthly mortgage payment amount using the formula: M = P_*(¹+r)" (1+r)"=1* 2. For each option, calculate the total costs after 1 year, 5 years, 10 years and 15 years. Include additional costs of home ownership such as taxes and home insurance. 3. Consider advantages and disadvantages of renting versus purchasing a home. 4. Determine which option is better over each interval: 1 year, 5 years, 10 years and 15 years. Defend conclusions with evidence. Here is the rubric for your project Factors to Consider Each…A couple who wants to purchase a home with a price of $290,000 has $50,000 for a down payment. If they can get a 20-year mortgage at 7% per year on the unpaid balance, find each of the following. (a) What will be their monthly payments? (b) What is the total amount they will pay before they own the house outright? (c) How much interest will they pay over the life of the loan? (a) Their monthly payments would be approximately $. (Do not round until the final answer. Then round to the nearest hundredth as needed.)