# 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. http://media.pearsoncmg.com/ph/esm/chet_cleaves_cbsm9e_12/tools/RealWorldCase_before.htm 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,