Reference no: EM13770982
A young physician makes $250,000 per year with an annual salary increase of 2%. He is interested in buying a house. He has $130,000 in his savings account. The appraisal value for the house is $600,000.
After exhaustive shopping for a mortgage, a bank offered him these options:
1. A mortgage for 30 years, 5.00% fixed, 0-points, with 20% down payment; or
2. A mortgage for 20 years, 4.50% fixed, 0-points, with 20% down payment; or
3. A mortgage for 15 years, 4.00% fixed, 0-points, with 20% down payment; or
4. A mortgage for 10 years, 3.50% fixed, 0-points, with 20% down payment; or
5. An ARM for 5 years, 3.00% fixed, 0-points, with 20% down payment, then 6% afterwards.
Note the following:
All closing costs, regardless of loan type are $10,000 payable at closing.
Escrow charges are $1,000 per month (assume that this is also tax deductible, and part of the debt-equity calculation)
His debt to equity ratio needs to be maintained at no more than 20% (this is calculated by dividing his mortgage payment including the escrow by his monthly GROSS salary)
Assume that all tax deductions including, local taxes, contributions to charity, certifications upkeep, malpractice insurance, tax-deferred retirement payments, disability and life insurances, and all other tax deductibles are $50,000/year.
He is married, and has 3 children (assume that deductions per dependent are $3,500). Assume that this situation will stay the same during the entire duration of this project.
All interest and closing costs are tax-deductible.
He is being taxed using the IRS tax tables for 2014.
For simplicity purposes, assume that these tax tables will be the same for the next 30 yrs.
Assume that interest rates accrues once per month (ie, use 12 periods per year).
Determine which plan best fits the person’s budget.
|
Accident prevention plan for company
: You are to complete an accident prevention plan for a company. The Complete list of content/sections to be covered is listed in the contents section below. The company profile, which you need to match to the content/sections, is listed in the comp..
|
|
Business cycle fluctuations tend to affect output
: The industries or sectors of the economy in which business cycle fluctuations tend to affect output the most are:
|
|
Determine how long the solar system-electric system
: The installed cost of a conventional electric hot water heater is $200. A family of four uses an average of 300 liters of hot water a day, which will require $350 worth of electricity each year.
|
|
Explain criminal behavior
: In a 1-2 page well constructed essay, discuss Rational Choice Theory as it is used to explain criminal behavior
|
|
All interest and closing costs are tax-deductible
: A young physician makes $250,000 per year with an annual salary increase of 2%. He is interested in buying a house. He has $130,000 in his savings account. The appraisal value for the house is $600,000. After exhaustive shopping for a mortgage, a ban..
|
|
Impact you have on creating renewed resources
: Examine the impact you have on creating renewed resources from these recycled items.
|
|
The net first cost of purchasing the new gear hobber
: A company owns a 8-year old gear hobber that has a book value of $62,000. The present market value of the hobber is $86,000. A new gear hobber can be purchased for $465,000. Using an outsider’s point of view, what is the net first cost of purchasing ..
|
|
Is it ever morally acceptable to use lethal force
: Is it ever morally acceptable to use lethal force (ex. pressure cooker bomb) against as civilian who is oppressing you politically and economically but is not life threatening your life? why or why not?
|
|
Heckscher-ohlin trade theory
: "The Heckscher-Ohlin Trade Theory is about how two countries can get greater gains from trading with each other if they have different resources one have more labor and the other have more capital. The Trade Ruler game is set in "the Hechscher-Ohlin ..
|