Question

Giselle wants to buy a condo that has a purchase price of $163,000. Giselle earns $2,986 a month and wants to spend no more than 25% of her income on her mortgage payment. She has saved up $33,000 for a down payment. Giselle is considering the following loan option: 20% down, 30 year at a fixed rate of 6.25%. What modification can be made to this loan to make it a viable option, given Giselle’s situation?

Answer 1

B

Step-by-step explanation:

Edge 2020 your welcome

Answer 2

Giselle should purchase points to lower the interest rate of the mortage, this will make the cuota decrease.

Step-by-step explanation:

163000 x20% = 32,600

163,000 - 32,600 = 130,040

current mortgage cuota:

`C * (1-(1+r)^(-time) )/(rate) = PV\\`

`C * (1-(1+0.0625/12)^(-30*12) )/(0.0625/12) = 130,040\\`

C= 800.68

800.68/ 2,986 = 0.2681 = 26.81%

this cuota exeeds the desired amount Giselle wants.

her couta can be as much as 2,986 x 25% = 746.5

Giselle should purchase points to lower the interest rate of the mortage, this will make the cuota decrease.