EX5-3 (Algo) The Munsters have been saving...The Munsters have been saving money in order to buy a house. They figure that, given current interest rates, they could afford a$405,000 home. Before looking at houses on the market they decide to explore the possibility of building a new home. The Munstersfigure they could buy a suitable lot for $72,500-$$77,500. At a minimum they want to build a 2,300-square-foot house. The cost for ahouse of the quality they desire is $162 per square foot. Given this information, should the Munsters pursue the option of building anew house?X Answer is complete but not entirely correct.$Estimated lowest total cost of buildingThe Munsters shouldnot consider444,000 XAnswer is complete and correct.building a new house under the current conditions.RE

The objective of the question is to determine whether the Munsters should consider building a new…

Answered: EX5-3 (Algo) The Munsters have been…

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter16: Real Estate And High-risk Investments

Section: Chapter Questions

Problem 2FPC

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EX5-3 (Algo) The Munsters have been saving... The Munsters have been saving money in order to buy a house. They figure that, given current interest rates, they could afford a $435,000 home. Before looking at houses on the market they decide to explore the possibility of building a new home. The Munsters figure they could buy a suitable lot for $87,500-$$92,500. At a minimum they want to build a 2,300-square-foot house. The cost for a house of the quality they desire is $174 per square foot. Given this information, should the Munsters pursue the option of building a new house? Answer is complete but not entirely correct. Estimated lowest total cost of building S 480,600
Lina is looking to purchase her first home and wishes to have a conventional mortgage as this will allow her to have access to better interest rates. She is looking to make an offer on a home for $300,000. As her budget is tight, she wants to know the minimum amount needed for a down payment for a conventional mortgage. A $5,000 В $45,000 C $15,000 D $60,000 E $25,000
6) Susan is looking to purchase her first home five years from today. The house costs $1,550,000. She will have to make a down payment of 10% of this amount and plans to take a loan from the bank for the difference. Bank charges are approximately 15% of the loan amount. She plans to start saving from today to cover both the down payment and the bank charges. a. How much will she need to save to cover both the down payment and bank charges? b. If she currently has $195,000 in her account and will make no further deposits over the next five years, what rate of interest must she earn on this account in order to achieve the savings target calculated in part (a) above?
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Read the passage and answer the following question(s). dis ins Homeowner and Renters Insurance: Protect Your Belongings You may be able to save hundreds of dollars a year on homeowners insurance by shopping around. You can also save money with these tips: Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium. Ask your insurance agent about discourks. You may be able to get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire retardant roofing material. Persons over 55 years of age or long-term customers may also be offered discounts. OD. Insure your house NOT the land under it. After a disaster, the land is still there. If you don't subtract the value of the land when deciding how much homeowners insurance to buy, you will pay more than you should. Don't wait till vou have lor
Problem: Your cousin and her partner have a combined gross income of $10,111 and monthly expenses totaling $3,205. They plan to buy a house with a mortgage whose monthly PITI will be $2,000. (a) If they do not qualify for an FHA mortgage, by how much should they reduce their monthly expenses in order to be eligible? (Set up an equation and solve it.)
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The Browning family of Colorado wants to buy a $102,000 house. (a) If they can get a loan of 80% of the value of the house, what is the amount of the loan?$ (b) What will be the down payment on this loan?$ (c) If they decide to obtain an FHA loan, what will be the minimum cash investment? (Do not forget that the maximum FHA loan for this location has to be determined using the FHA Maximum Loan Values by State table.)$
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11. Can I afford this home? - Part 1 Can Valerie and Shen afford this home using the monthly income loan criterion? Next week, your friends Valerie and Shen want to apply to the Tenth National Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $155,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows. To assist in the preparation of the worksheet, Valerie and Shen also collected the following information: • Their financial records report a combined gross before-tax annual income of $85,000 and current (premortgage) installment loan, credit card, and car loan debt of $1,240 per month. • Their property taxes and homeowner's insurance policy are expected to cost $3,488 per year. • Their best estimate of the interest rate on their mortgage is 7.5%, and they are interested in obtaining a 15-year loan. They have accumulated savings of $38,500 that can be used to…
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?

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