Compute the per month cost including interest

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Tom and Nancy want to buy a house in a particular neighborhood. they have two children ages 1 and 4. The average price home in this neighborhood runs about $350,000. Together their family income is $100,000. They have saved $75,000. The home they want to purchase costs $300,000. Taxes on the home run $3.00 per $100 of assessed value of the home. For new homes the assessed value is equal to 75% of the purchase price. Insurance runs half of one percent of the purchase price of the home. An Adjustable Rate Mortgage (ARM) requires a 10% down payment. Conventional loans require 20% down payment. Use the current rate of 4.5% at 30 years to calculate the mortgage for the Conventional loan. Use the current ARM rates for the Adjustable Rate Mortgage. Show all work for full credit.

Discussion 1: Compute the per month cost including interest, taxes and insurance (use above formula to get the taxes and insurance cost).

Reference no: EM132849550

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