Kathy wants to buy a condominium selling for $98,000. The taxes on the property are $1300 per year, and homeowners' insurance is $326 per year. Kathy's gross monthly income is $4500. She has 15 monthly payments of $135 remaining on her van. The bank is requiring 20% down
and is charging a 9.5% interest rate with no points. Her bank will approve a loan that has a total monthly mortgage payment of principal,
interest, property taxes, and homeowners' insurance that is less than or equal to 28% of her adjusted monthly income. Complete parts a),
through h) below.
a) Determine the required down payment.
The required down payment is $
b) Determine 28% of her adjusted monthly income.
28% of her adjusted monthly income is $(Round to the nearest cent as needed.)
c) Determine the monthly payments of principal and interest for a 25-year loan.
The monthly payment of principal and interest for a 25-year loan is $
(Round to the nearest cent as needed.)
d) Determine her monthly payment, including homeowners' insurance and taxes.
Her total monthly payment, including homeowners' insurance and taxes is $
(Round to the nearest cent as needed.)
e) Does Kathy qualify for the loan?
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