<p> Mortgage Problems 1. Calculate the monthly payment on a $275,000 loan if you were to obtain a 30 year mortgage today and compare that to your monthly payment if you were to have obtained the same loan in 1981. What is the difference in total interest? </p><p>2. If you own a home that just got reappraised at $127,000 and you have a mortgage balance of $93,000; how much equity do you have in your house? What is the loan to value ratio?</p><p>3. Sally owes $87,309 on the mortgage on a condo that she owns, which is worth $115,000. She wants to take out a home equity loan (second mortgage). The bank loan officer tells her that the maximum loan to value percent is 90%. How much could Sally borrow?</p><p>Escrow & Monthly Payments 4. How much will my monthly escrow payment be in my property taxes are expected to be $2,895 annually and my homeowners’ insurance premium is $745 per year?</p><p>5. Tammy wants to buy a home that costs $183,000. She has $23,000 for the down payment, and her bank will lend her 160,000 on a 25 year, 6.2% mortgage. Find Tammy’s monthly payments and the total amount of interest she would pay over the term of the mortgage. 6. Mike’s monthly mortgage payment is $675.13. His property taxes are $1,392 and his homeowners’ insurance premium is $885. He also pays $48.17 a month for PMI. Find his total monthly PITI payment.</p><p>7. Aaron and Cienna are considering buying a house for $175,000. They would make a $10,000 down payment, and borrow the rest with a 30-year fixed rate mortgage at 7.45%. Annual property taxes would be $5,700, and homeowners’ insurance would be $935. They would also need to pay $84.00 monthly for PMI. What would their total monthly payment (PITI) be?</p><p>8. If you wanted to buy a house worth $399,000, and you could afford to make a 20% down payment. What would your monthly payment be if you financed the rest with a 25-year mortgage at 6.98%? Annual property taxes are $10,384 and insurance would cost $2,850 per year.</p><p>How Much House Can You Afford?</p><p>9. You have a yearly salary of $36,000. Given that your housing expenses (PITI) can be no more than 28% of your monthly gross income, how much can you afford each month for your payment, taxes, and insurance (PITI)?</p><p>10. Given the same salary in problem 9, now assume you also have a car payment of $249 and student loans of $85. Given that all of your long-term debt cannot be more than 36% of your monthly gross income, what is your maximum debt and maximum PITI payment? 11. You and your roommate decide to buy a house together. You have an annual salary of $42,000 and your roommate makes $11.50 an hour. (Assume your roommate works full-time 52 weeks a year). Together you have no debt, and you have $20,000 for a down payment. Also assume taxes and insurance totals $250 a month. Find the following:</p><p> a. Maximum monthly PITI payment.</p><p> b. Maximum house price on a 30-year fixed mortgage at 4.5%</p><p>12. Julie and John Smith are in the market for a new house. Combined they have yearly salaries of $ 103,000 as well as income from their mutual funds of $5,400 a year. They also have two car payments which total $620 a month. Find the following:</p><p> a. Maximum PITI payment per month</p><p> b. Maximum total debt per month</p><p> c. What is the maximum price of a house they can afford if they have $35,000 to use as a down payment? (Assume same mortgage information as problem 11. Also assume taxes and insurance make up $300 of the monthly payment.) 13. You bought your home last year for $130,000. You made a down payment of 20%. Through your mortgage payments, you have reduced your debt by $2,000. The annual appreciation rate for homes in your area has averaged 3%. a. What was the amount of your down payment?</p><p> b. What was your initial loan amount?</p><p> c. How much do you owe now?</p><p> d. What is the current market value of your home?</p><p> e. What is your equity in the home now?</p><p>Up-Front Expenses</p><p>14. George wants to buy a house for $192,800. He is planning on making a 5% down payment, and closing costs will amount to $3,170. Annual property taxes are $5,155 and annual homeowners’ insurance premiums will total $1,250. How much money will he need up front?</p><p>15. Suppose you accept a mortgage for $150,000. What finance charge will you have to pay at closing if the lender charges (a) 1 point, (b) 2 points, or (c) 1.5 points 16. Suppose you buy a townhouse for $155,000, and make a 5% down payment. If you take out a mortgage that requires paying 1.75 points, how much will you pay for the points?</p><p>17. Heidi is looking for a mortgage for her house. The house costs $222,950 and she will make a 8% down payment. She is considering two different choices for a 30- year fixed rate loan. Points Interest Rate 0 7.75% 1.5 6.78% a. Find the up-front cost of the points is she chooses that option.</p><p> b. Find her monthly mortgage payment with each option.</p><p> c. How much would she save over 30 years by paying points, assuming that she keeps her loan for the full 30 years.</p><p> d. Find the payback period for paying points.</p><p>18. Hilda is buying a home for $74,000. She will make a 20% down payment and estimates closing costs as: legal fees, $950; title insurance, $140; property survey, $250; inspection, $175; loan processing fee, $84; recording fee, $740. What amount of mortgage loan will she need? What amount of cash will she need when she buys the house?</p>