The young household is looking at buying house

Assignment Help Financial Management

Reference no: EM131989861

The Young household is looking at buying a house. The three houses they are looking at cost the following: $160,000, $190,000 and $210,000. They can pay up to $900 in monthly mortgage payments. They currently have $18,000 set aside for a down payment. Similarly to the Tremblay’s bank, the Youngs’ bank will add $40 to each mortgage payment if they put less than 20% down and an additional fee of $30 more to each payment if they put less than 10% down.

a. Which of these houses can they afford with a 30-year mortgage at an interest rate of 3.5%?

b. Which of these houses can they afford with a 15-year mortgage at an interest rate of 2.8%?

c. Which house do you think they should buy?

Reference no: EM131989861

Questions Cloud

What will be the future value of the money at end of year : What will be the future value of the money at the end of the fifth year, that is, how money will you have in the account at the end of the fifth year?

About the present value : For each of the following annuities, calculate the present value.

What is the value of the investment today : What is the value of the investment today? What would the value be if the payments occurred for 76 years?

Business to show increased cash but decreased profits : Is it possible for a business to show increased profits but decreased cash? Is it possible for a business to show increased cash but decreased profits?

The young household is looking at buying house : The Young household is looking at buying a house. Which of these houses can they afford with a 30-year mortgage at an interest rate of 3.5%?

Why are there operating and capital budgets : Why does a budget document often provide several years of budgetary data? Why are there operating and capital budgets?

What is the accumulation factor in the fifth period : If a(t) = (.5t+k)2 wher k is a positive constant, what is the accumulation factor in the fifth period?

Calculate weighted average cost of capital : Calculate weighted average cost of capital for Johnson LLC (using target capital structure weights aforementioned for debt, preferred stock and common equity)

Return on investment for new or existing services : Explain why the organization's mission and community needs should be considered when evaluating the return on investment (ROI) for new or existing services.

User Account

All Pages