Question

Ben and Carla Manchester plan to buy a condominium. They will obtain a $210,000, 20-year mortgage at 8.0 percent. Their annual property taxes are expected to be $2,676. Property insurance is $1,296 a year, and the condo association fee is $305 a month. Based on these items, determine the total monthly housing payment for the Manchesters. Use Exhibit 9-9. (Round time value factor to 2 decimal places and final answer to the nearest whole number.)

Answer 1

$2,393

Step-by-step explanation:

Property taxes and insurance can be added to the Manchester's monthly mortgage payment.

The mortgage payment without the property taxes or insurance expense = $210,000 / 119.5546 PV annuity factor, 0.667%, 240 periods) = $1,756.52

monthly installment for property taxes = $2,676 / 12 = $223

monthly installment for insurance expense = $1,296 / 12 = $108

condo association fee = $305

total monthly payment = $2,392.52 ≈ $2,393