Solution-Cost of insurance be per month

Cost of insurance be per month

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Reference no: EM132596486

1. 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.

Interest for an ARM currently is 4.5 %. The conventional loans are 5.25% today.

Compute the per month cost including interest, taxes and insurance (use above formula to get the taxes and insurance cost) for a ARM.

Show your work:

What will their down payment be?
What will the cost of insurance be per month?
What will their taxes be per month?
What will their principal and interest be per month?
What is their total monthly payment going to be including everything?

Reference no: EM132596486

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Cost of insurance be per month

Reference no: EM132596486

Reference no: EM132596486

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