Mm255 Unit 8 Homework

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Get started on the assignment by watching the Should I Buy a House? video on the link below then answer the following questions. Joe has decided that he is tired of paying rent and not building equity of his own. He thinks that he is ready to assume the responsibility of owning a home and has found what he believes is the perfect first home. Joe meets with the loan officer at his bank where the process of buying a home is started. The loan officer provides Joe with a great deal of information, leaving him excited and apprehensive at the same time. What you know: The purchase price of the house is $75,000. Joe has $10,000 in savings. Joe makes $15 per hour and works 40 hours per week. 30-year mortgage interest rate of 6.25% and a monthly payment of $439.00 15-year mortgage interest rate of 5.25% and a monthly payment of $575.00 Down payment: 5% minimum Taxes last year were $375. Insurance is $250 per year. What you are looking for: 1. Can Joe afford the monthly payments with taxes and insurance for either a 30 or 15 year mortgage? 2. If Joe buys the house, will he have enough money left over on a monthly basis to live comfortably? 3. Does Joe have enough in savings to pay for the down payment and all of the closing costs? Solution Plan: Complete the following questions based upon the information in the video and other information provided in the worksheet. 1. Joe figures that with overtime he will average 40 hours a week for 52 weeks a year. If his current wage is $15.00 per hour, how much will he make per year?15*40*52= $31,200.00 annually 2. How much would Joe’s wages be in an average month?31200.00/12 = $2600.00 3. Based upon the information in the video, Joe has a car payment of $249 per month. The average utilities are: Electricity,

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