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-$$92,500. At a minimum they want to build a 2,300-square-foot house. The cost for a house of the quality they desire is $174 per square foot. Given this information, should the Munsters pursue the option of building a new house? Answer is complete but not entirely correct. Estimated lowest total cost of building $ 480,600
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- EX5-3 (Algo) The Munsters have been saving... The Munsters have been saving money in order to buy a house. They figure that, given current interest rates, they could afford a $405,000 home. Before looking at houses on the market they decide to explore the possibility of building a new home. The Munsters figure they could buy a suitable lot for $72,500-$$77,500. At a minimum they want to build a 2,300-square-foot house. The cost for a house of the quality they desire is $162 per square foot. Given this information, should the Munsters pursue the option of building a new house? X Answer is complete but not entirely correct. $ Estimated lowest total cost of building The Munsters should not consider 444,000 X Answer is complete and correct. building a new house under the current conditions. REEX5-3 (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 $425,000 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 $82,500-$$87,500. At a minimum they want to build a 2,300-square-foot house. The cost for a house of the quality they desire is $170 per square foot. Given this information, should the Munsters pursue the option of building a new house? Estimated lowest total cost of building The Munsters should not consider building a new house under the current conditions.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?
- 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 $25,000Read 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 lorB. Study the following situation then answer the questions that follow: Mr. and Mrs. Cruz are planning to have their own home but have limited budget. They went to a home developer for some advice as to how the down payment will be produced for their chosen house and lot. This is the advice of the developer. To raise the amount of the down payment of the house and lot at the end of 5 years, you will invest P 23 000 at the end of each year for five years in an account that pays 8-% compounded annually. To find the down payment needed, give the values of the following: R = į(1) = m = t = j=, The situation above requires you to find amount (future value at the end of the term) F:
- 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.)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.)$1. In the aftermath of the mortgage crisis, Phil and Crystal, are considering remodeling their home. They originally wanted to sell their home and move to another area, but news shows a decline in real estate values. Their plan now is to improve their home’s curb appeal as well as update the interior. They estimate the cost will be $86,000. How much must they invest today at 6% interest compounded quarterly to have the money they need to remodel in 8 years?
- Mary has found a beautiful home on Richmond Rd. that she loves.The price of the home is $285,000. If Mary and George qualify for a30-year loan at a fixed interest rate of 3.99%, can they afford thehome? (Hint: Don't forget about the down payment!) 4. Mary and George finally decide on a 3 bedroom home on ManchesterCt. The price of the home is $188,000. a) What is the total amount the couple will have to finance? b) If the couple purchases the home on a 30-year loan at a fixedinterest rate of 3.99%, what will be their monthly payment? c) What is the total cost of the home using the 30-year loan.(Hint: Don't forget to include the down payment!) d) How much of the total cost is interest? e) Mary's friend, Beth, suggests they check into a 15 year loan and comparethe monthly payments and the overall cost of the home. If Mary andGeorge purchase the home on a 15-year loan with a fixed interest rate of3.99%, what with be their monthly payment? f) What is the total cost of the home using the…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?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…