Question

Can you help me figure out how to solve this??

Answer 1

The Solution:

Given that the mortgage value is $170,000, and 1/5 of the mortgage value as Down Payment.

a.

We are asked to find the Down Payment.

`\text{ Down Payment=}(1)/(5)*170000=\text{ \$34,000}`

Thus, the Down Payment is $34,000

b.

The amount (in dollars) of the mortgage that Bradys is applying for is:

`\text{ Amount of Mortgage =170,000-34,000}=\text{ \$136,000}`

Therefore, the amount (in dollars) of the mortgage that Bradys is applying for is $136,000

c.

For every $1000, the interest rate charged is $5.37.

So, for $136,000, Bradys is requesting for

`\begin{gathered} \text{ \$1000 = \$5.37} \\ \\ \text{ \$136,}000=136*5.37=\text{ \$730.32} \end{gathered}`

Therefore, the amount for Bradys' monthly payment of the principal and the interest is $730.32

d.

The total amount of interest that will be paid over the life of the loan is:

`\text{ Total Interest = Total Payment - Total Loan}`

In this case,

`\begin{gathered} \text{ Total payment=payment for 30 years=monthly payment}*12*30 \\ \\ \text{Total Payment =730}.32*12*30=\text{ \$262915.20} \end{gathered}`

Total Loan = $136,000

So,

`\text{Total Interest =262915.20 - 136000 = \$126915.20}`

Thus, the total amount of interest paid over the life of the loan is $126915.20

e.

The total monthly payment that include principal, interest, property tax and property insurance is calculated as below:

`\text{ Monthly payment of property tax =}\frac{\text{ Yearly tax}}{12}=(1710)/(12)=\text{ \$142.50}`

`\begin{gathered} \text{ Monthly payment of property Insurance =}\frac{\text{ Yearly insurance charge}}{12}=(1458)/(12) \\ \\ \text{Monthly payment of property Insurance = \$121.50} \end{gathered}`

`\text{Monthly payment of principal and interest = \$730.32}`

Thus, the total monthly payment is

`730.32+121.50+142.50=730.32+264=\text{ \$994.32}`

Therefore, the total monthly payment is $994.32

f. Not needed by the user.

g.

Given that to qualify for the mortgage payment, 1/4 of the family monthly income must exceed the monthly payment for the mortgage loan.

The range of monthly income of $4000 and above is required to qualify for this size mortgage payment. This is because:

`\begin{gathered} (1)/(4)*4000=\text{ \$1000 } \\ \\ \text{ Monthly payment = \$994.32} \\ \text{ Since 1000 > 994.32} \\ It\text{ follows that \$4000 is enough to qualify one for the mortgage loan.} \end{gathered}`

Therefore, a monthly income of $4000 is good