1.a How much would the Gerrards have to put down if the lender required a minimu

Question

1.a How much would the Gerrards have to put down if the lender required a minimum 15 percent down payment? Round the answer to the nearest cent.

1.b Given that the Gerrards want to put only $22,000 down, how much would total closing costs be? Down payment should be taken into account. Round the answer to the nearest cent.

1.c Considering only principal and interest, how much would their monthly mortgage payments be? Round the answer to the nearest cent.

1.d Using a $22,000 down payment on a $205,000 home, what would the Gerrards' loan-to-value ratio be? Round to two decimal places.

1.e Calculate the monthly mortgage payments on a PITI basis. Round the answer to the nearest cent.

Explanation / Answer

1(a) Here, down payment is 15% of purchase price which is $205000

hence, down payment=15% of 205000=$30750

the lender charges 2 points for 15% down payment

which amounts to 2% of 205000=4100

closing costs = 5% of 205000

=10250

total amount=30750+4100+10250=$45100

1(b) here with 22000 down payment which is less than 15%

hence lender will charge 3 points which is 3% of 205000=6150

total closing costs =6150+22000

=$28150

here considering down payment 22000

loan value =205000-22000=183000

loan to value ratio=183000/205000

=0.832

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