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Raymond and Kevin want to purchase a house. They offer $807,000 with 20% down payment. They are pre-qualified for a 30-year loan at 3.1%. Calculate their anticipated monthly payments.

User Ruhalde
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Answer:

the anticipated monthly payment for the house is $3,774.73.

Explanation:

First, we need to calculate the down payment amount:

Down payment = 20% x $807,000

Down payment = $161,400

The loan amount is then the difference between the purchase price and the down payment:

Loan amount = $807,000 - $161,400

Loan amount = $645,600

Next, we can calculate the monthly payments on the loan using the following formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ]

Where:

M = monthly payment

P = loan amount

i = monthly interest rate (annual rate divided by 12)

n = total number of payments (number of years multiplied by 12)

The monthly interest rate is 3.1% / 12 = 0.2583%

The total number of payments is 30 years x 12 months/year = 360

Using these values, we can calculate the monthly loan payment:

M = $645,600 [ 0.002583(1 + 0.002583)^360 ] / [ (1 + 0.002583)^360 - 1 ]

M = $2,733.07

So the anticipated monthly loan payment is $2,733.07.

To calculate the total anticipated monthly payment, we need to add property taxes and homeowner's insurance. Let's assume the property taxes are $10,000 per year and homeowner's insurance is $2,500 per year. We can divide these amounts by 12 to get the monthly amounts:

Property taxes = $10,000 / 12 = $833.33

Homeowner's insurance = $2,500 / 12 = $208.33

Total monthly payment = Monthly loan payment + Property taxes + Homeowner's insurance

Total monthly payment = $2,733.07 + $833.33 + $208.33

Total monthly payment = $3,774.73

Therefore, the anticipated monthly payment for the house is $3,774.73.

User Pellekrogholt
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