Question

Antonia is purchasing a house for $210,000, with a 15-year fixed-rate

mortgage at 4.75% interest. She has made a 5% down payment. The house is
valued at $205,000, and the local tax rate is 3.5%. Her homeowners insurance
is $480 per year. What are her total monthly payments? (Use the table below
to calculate PMI premiums.)
Base-To-Loan %
Fixed-Rate Loan
30 yrs. 15 yrs.
ARM 2% + 1 Year Cap
30 yrs 15 yrs
95.01% to 97%
0.90% 0.79%
n/a
n/a
90.01% to 95%
0.78% 0.26%
0.92%
0.81%
85.01% to 90%
0.52% 0.23%
0.65%
0.54%
85% and Under
0.32% 0.19%
0.37%
0.26%
A. $2232.92
B. $2894.71
O C. $2345.76
O
D. $2420.09

Answer 1

Antonia's total monthly payments for her house, considering the mortgage's principal and interest, PMI, property tax, and homeowners insurance, would be $2,251.73. This differs from the provided options A-D.

Step-by-step explanation:

The objective is to calculate Antonia's total monthly payments for her house with the given details about down payment, interest rate, and additional costs such as property tax and home insurance, plus PMI (Private Mortgage Insurance).

First, we calculate the loan amount after a 5% down payment:

210,000 - (5% of 210,000) = 210,000 - 10,500 = 199,500

Antonia's loan amount is $199,500.

Since her down payment is less than 20%, she must pay PMI. Based on the information in the PMI premiums table and her loan amount related to the house value, her PMI rate for a 15-year fixed mortgage is 0.26% (because her loan-to-value ratio is between 90.01% and 95%).

Annual PMI = 199,500 * 0.26% = $518.70

Monthly PMI = $518.70 / 12 = $43.22

Next, we calculate the property tax:

Annual property tax = 205,000 * 3.5% = $7,175

Monthly property tax = $7,175 / 12 = $597.92

Monthly homeowners insurance = $480 / 12 = $40

To calculate the monthly mortgage payment (without PMI, taxes and insurance), we use a standard mortgage payment formula or a financial calculator:

Monthly mortgage payment (principal and interest) = $1,570.59

Finally, the total monthly payment is:

Total monthly payment = Monthly mortgage payment + Monthly PMI + Monthly property tax + Monthly homeowners insurance

Total monthly payment = $1,570.59 + $43.22 + $597.92 + $40 = $2,251.73

Therefore, the correct answer is none of the given options A-D.