Final answer:
To calculate Nicole's monthly mortgage payment for a $275,000 house with a $35,000 down payment, 3.05% interest rate, property tax of $1,250/year, 30-year mortgage term, 0.5% PMI, and $1,000 property insurance, use the mortgage formula. The monthly payment will be $1,305.84.
Step-by-step explanation:
To calculate Nicole's monthly mortgage payment, we need to consider the loan amount, interest rate, loan term, and additional costs such as property tax, PMI (Private Mortgage Insurance), and property insurance.
1. Calculate the loan amount by subtracting the down payment from the house price: $275,000 - $35,000 = $240,000.
2. Use a mortgage calculator or formula to calculate the monthly payment:
Monthly Payment = [Loan Amount x (Interest Rate/12)] / [1 - (1 + Interest Rate/12)^(-Loan Term in months)]
Plugging in the values:
Monthly Payment = [240,000 x (0.0305/12)] / [1 - (1 + 0.0305/12)^(-30 x 12)]
3. Calculate the additional costs:
PMI = 0.5% of the loan amount = 0.005 x 240,000 = $1,200/year = $100/month
Property Tax = $1,250/year = $104.17/month
Property Insurance = $1,000/year = $83.33/month
4. Add the additional costs to the monthly payment:
Total Monthly Payment = Monthly Payment + PMI + Property Tax + Property Insurance
Total Monthly Payment = Monthly Payment + $100 + $104.17 + $83.33
Simplifying the calculation:
Total Monthly Payment = $1,305.84
Therefore, Nicole's monthly payment will be $1,305.84.