Question

Tony has calculated that he can afford a new average monthly expenditure of $2,200 for a home. He has a $30,000 down payment and found a home listed at $275,000. He would finance the rest with a 30 -year fixed-rate mortgage at 6.553 . The houte aho has 5900 annual HOA fees. insurance for the home would be 5325 per month and the aseut properfy tases are 55,900 . What would be Tonv's net monthly expenditure? from this informutions, can he afford this home?

Answer 1

To calculate Tony's net monthly expenditure, we need to consider the mortgage payment, HOA fees, insurance, and property taxes. After calculating these costs, Tony's net monthly expenditure would be approximately $2,158.15, and he can afford this home within his budget.

Step-by-step explanation:

To calculate Tony's net monthly expenditure, we need to consider the monthly mortgage payment, HOA fees, insurance, and property taxes. First, let's calculate the monthly mortgage payment using the loan amount, interest rate, and loan term. The loan amount is $275,000 - $30,000 = $245,000. Using a mortgage calculator, we find that the monthly mortgage payment is approximately $1,557.

Next, we add the annual HOA fees to the monthly expenditure. The annual HOA fees are $5,900, which is approximately $492 per month.

Then, we add the monthly insurance cost of $53.25 and the monthly property taxes of $55.9. Summing up all these costs, we have: $1,557 + $492 + $53.25 + $55.9 = $2,158.15.

Therefore, Tony's net monthly expenditure would be approximately $2,158.15. Since his calculated maximum affordable monthly expenditure is $2,200, he can afford this home within his budget.

Answer 2

Tony's net monthly expenditure for the home would be $12,016.38. Based on his average monthly budget of $2,200, he cannot afford this home.

Step-by-step explanation:

To calculate Tony's net monthly expenditure, we need to consider all the expenses associated with owning the home. First, we subtract the down payment of $30,000 from the home price of $275,000 to find the loan amount: $275,000 - $30,000 = $245,000. Next, we calculate the monthly mortgage payment using the loan amount, the loan term of 30 years, and the interest rate of 6.553%. Using the formula for calculating the monthly payment on a fixed-rate mortgage, the monthly mortgage payment will be $1,541.38.

In addition to the mortgage payment, Tony will also have to pay annual HOA fees, which amount to $5,900 divided by 12 months, resulting in a monthly payment of $491.67. Tony also needs to consider the monthly cost of insurance, which is $5325 per month. Finally, Tony needs to include property taxes, which are $55,900 per year divided by 12 months, resulting in a monthly payment of $4,658.33.

To calculate Tony's net monthly expenditure, we add up all the monthly costs: Mortgage payment + HOA fees + Insurance + Property taxes = $1,541.38 + $491.67 + $5,325 + $4,658.33 = $12,016.38. Therefore, Tony's net monthly expenditure for the home is $12,016.38.

To determine if Tony can afford this home, we compare his average monthly expenditure of $2,200 to his net monthly expenditure of $12,016.38. Since Tony's net monthly expenditure is significantly higher than his budgeted amount, he cannot afford this home.