Question

2. Jamie Lee and Ross are estimating that they will be putting $40,000 from their savings account toward a down payment on their home purchase. Using the traditional financial guideline suggestion of "two and a half times your salary plus your down payment," calculate approximately how much Jamie Lee and Ross can spend on a house.
3. Using Your Personal Financial Plan Sheet 24, calculate the affordable mortgage amount that would be suggested by a lending institution and based on Jamie Lee and Ross’ income.
How does this amount compare with the traditional financial guideline found in Question #2?
Use the following amounts for Jamie Lee and Ross’ calculations:
• 10% down payment
• 28% for TIPI
• $500.00 per month for estimated combined property taxes and insurance
• 5% interest rate for 30 years

4. Jamie Lee and Ross found a brand new three-bedroom, 2 ½ bath home in a quiet neighborhood for sale. The listing price is $275,000. They would like to place a bid of $260,000 on the home. The seller’s counteroffer was $273,000. What should Jamie Lee and Ross do next to demonstrate to the owner that they are serious buyers?

5. Jamie Lee and Ross received a signed contract from the buyer accepting their $273,000 offer! The seller also agreed to pay two points toward Jamie Lee and Ross’ mortgage. Calculate the benefit of having points paid toward the mortgage if Jamie Lee and Ross are putting a $40,000 down payment on the home.

6.Calculate Jamie Lee and Ross’ mortgage payment, using the 5 percent rate for 30 years on the mortgage balance of $233,000.

Answer 1

Answer:

Explanation:

2. Down payment is $40,000 Two and half times means 5/2 i.e. 5/2*$40,000 = $100,000...

5. One mortgage point costs 1% of the mortgage loan amount.

If Jamie Lee and Ross are putting a $40,000 down payment on a home with an accepted purchase price of $273,000, then the mortgage loan will be for $233,000.

$273,000 - $40,000 = $233,000.

Two points paid toward the mortgage will be a cost of $4,660 to the seller.

$233,000 x 0.02 = $4,660.

Typically, purchasing points means that a sum of money has been paid to the lender at closing to reduce the financing cost of the loan. The benefit of purchasing points is that it will secure a lower interest rate for the home buyers. In this sense, points are not put towards the mortgage loan itself, but are used to decrease overall expense to the home buyer over the term of a mortgage. A lower interest rate over the term of a mortgage can account for tens of thousands of dollars of saved interest.

If in this case the seller is simply giving money to the home buyers to put against the mortgage, then $4,660 will reduce the total loan amount to $228,340.

Although this question is somewhat ambiguously worded, it is more likely that the points are being purchased to secure a lower interest rate. While this doesn't represent an immediate windfall to the home buyers and does not decrease the mortgage loan amount, it would provide the greatest overall advantage to the home buyers.

I can't do 3,4,6  I'm very sorry about this man. I did my best but they come out wrong and I don't want to misguide you or mislead you in any way....

Very sorry!