a-Kathy fields wants to buy a condominium selling for $95,000. The bank is requi

Question

a-Kathy fields wants to buy a condominium selling for $95,000. The bank is requiring 20% down and is charging 9.5% interest for a 25 year loan. determine the amount required down payment and the amount of the monthly payment for the principal and interest.

b-Kathys gross monthly income is $4000, and she has 15 monthly payments of $135 remaining on her van. Determine the maximum monthly payment the banks loan officer believes she can afford. If the taxes on the condo described above are $1500 per year and the insurance is $336 per year, what would her total monthly payment be? Does she qualify for the loan?

c-If Kathy buys the condo under the terms described above determine how much of her first payment is applied to the principal, the total amount she pays in principal and interest over the life of the mortgage (not including taxes or insurance), and the total interest she pays.

Explanation / Answer

total price = $95,000

Down Payment = 20% of 95,000 = $19,000

Remaining balance = $76,000 for 25 year loan

Principal per year = $76000/25= $3040

Interest = 3040*9.5/100 =$288.8

total payble amount pr year = $3040+$288.8 = $3328.8

Per month Payable = $277.4 ( as #253.33 as principal and 24.07 as Interest)

b)

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