Will they get the home loan? You have a gross annual income of $175,000 and have been pre-approved for a 30-year mortgage loan at 3.375% as long as the back-end ratio does not exceed 36%. The house you want to buy costs $560,000, and you plan to make a down payment of 20%. Your monthly payment would be $1980.59. Your research shows that the semi-annual property taxes for this house are $3,450. You have been given a quote from your insurance company of a $1,290 annual premium. You currently have a $579 monthly car payment and your monthly credit card bills average $2,000.
Will they get the home loan? You have a gross annual income of $175,000 and have been pre-approved for a 30-year mortgage loan at 3.375% as long as the back-end ratio does not exceed 36%. The house you want to buy costs $560,000, and you plan to make a down payment of 20%. Your monthly payment would be $1980.59. Your research shows that the semi-annual property taxes for this house are $3,450. You have been given a quote from your insurance company of a $1,290 annual premium. You currently have a $579 monthly car payment and your monthly credit card bills average $2,000.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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Concept explainers
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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Need the loan amount
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Back-End ratio shows proportion of monthly income used to pay off debt.
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