Suppose you take a 10-year mortgage for a house that costs $252,923. Assume the following: The annual interest rate on the mortgage is 3.1%. The bank requires a minimum down payment of 10% of the cost of the house.
Suppose you take a 10-year mortgage for a house that costs $252,923. Assume the following:
- The annual interest rate on the mortgage is 3.1%.
- The bank requires a minimum down payment of 10% of the cost of the house.
- The annual property tax is 1.4% of the cost of the house.
- The annual homeowner's insurance is $891.
- The monthly PMI is $91.
- Your other long-term debts require payments of $1,782 per month.
If you make the minimum down payment, what is the minimum gross monthly salary you must earn in order to satisfy the 36% rule?
Round your answer to the nearest dollar.
mortgage amount =252923
Down payment =10%
Down payment =25292.30
mortgage amount =252923-25292.30
mortgage amount =227630.70
interest rate =3.1% Annual interest rate
Period =10 years
Present value FACTOR =1-(1+r)-n/r
Present value FACTOR =1-(1.031)-10/0.031
Present value FACTOR =8.48
Loan amount =Annual payment x present value FACTOR
227630.70=8.48 x Annual payment
Annual payment=26623.47
monthly payment =$2218.62
Annual property tax =1.4%
Annual property tax =0.014 x 252923
Annual property tax =3540.92
monthly payment tax=295.076
Home insurance monthly=74.25
monthly PMI=91
other loan payments monthly =1782
Total monthly payments for all laibilties =2218.62+295.076+74.25+91+1782=4460.94
Total monthly laibilties =4460.94
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