What is the maximum price you can afford to pay for a house

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Reference no: EM131960799

Question: You are considering buying a house close to the university so that you can devote more time to your academic career. You have estimated that you can afford $3500 per month as a mortgage payment because you plan to rent rooms out to your friends. You have managed to find a banker that is a risk taker and is willing to loan you money for the house under the following conditions: 5% APR compounded biannually, 10% down payment, a term of 4 years, monthly payments, and an amortization period of 25 years.

1) What is the maximum price you can afford to pay for a house?

2) Is this mortgage a conventional mortgage? Why?

Reference no: EM131960799

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