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Name: ______________________________________________________ Period: ____ Score: ________ FM Chapter 7 Review (TB:39) The Bradys 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 they want to buy costs $360,000, and they plan to make a down payment of 20%. Their research shows that the semi-annual property taxes for this house are $3,450. They have been given a quote from their insurance company of a $1,290 annual premium. The Bradys currently have a $579 monthly car payment and their monthly credit card bills average $2,100. The bank requires a monthly escrow payment that is added to the mortgage payment.a. Monthly gross = b. Amount financed = c. Monthly mortgage payment = d. Monthly tax = e. Monthly insurance = f. Total monthly expenses = g. Back end ratio = h. Will the bank agree to finance the Bradys’ dream home?i. How much will he need to send the bank each month?j. According to the Closing Cost Rule of Thumb how much should they expect their closing costs to be?(SM7-1:1B) Find the monetary range that is recommended for the monthly housing budget for Barbara who makes $5,000 per month according to the Recommended Range for housing. Round to the nearest dollar.(SM7-1:2) Hannah’s financial advisor believes that she should spend no more than 26% of her gross monthly income for housing. She has determined that amount is $1,794 per month. Based on this amount and her advisor’s recommendation, what is Hannah’s annual salary?(SM7-1:4) Rex makes $12.50 per hour. He works 35 hours a week. He pays 24% of his gross earnings in federal and state taxes and saves 10% of his monthly gross income. He is considering renting an apartment that will cost $1,600 per month.a. Is this monthly rental fee within the recommended 25%–30% housing expense range? b. Based upon his expenses, can he make the monthly payments? (SM7-1:5) Brian’s monthly gross income is $2,950. Brian found an apartment near his work that rents for $1,300 per month. Does this apartment fall into the Recommended Range for housing for him?(SM7-1:10) Conan is moving into a two-bedroom apartment in Valley Oaks. The monthly rent is $2,000. His up-front fees are shown below. How much can he expect to pay up front for this apartment?Application fee: 3% of one month’s rent Credit application fee: $20 Security deposit: 1 month’s rent and last month’s rent Broker’s fee: 14% of one year’s rent(SM7-1:12) NuHome Movers charges $95 per hour for loading/unloading services and $80 per hour for packing/unpacking services. Their charge is $2.50 per mile for truck rental. Jay is moving a distance of 200 miles and needs 9 hours of loading/unloading and 7 hours of packing/ unpacking. What will his moving cost be if the service also charges 7.25% tax on the total?(SM7-3:1) The Jacobs family is planning to buy a home. They see a home they like and compute that they would need to borrow $213,000 from a bank over a 30-year period. The APR is 3.75%. a. What is the monthly payment, to the nearest cent? b. What is the total of all of the monthly payments over the 30 years? c. What is her total interest for the 30 years?(SM7-3:3) A bank requires that the Dotkoms pay their homeowner’s insurance, property taxes, and mortgage in one monthly payment to the bank. If their monthly mortgage payment is $1,711.22, their semi-annual property tax bill is $3,239, and their annual homeowner’s insurance bill is $980, how much do they pay the bank each month?(SM7-3:4) You are trying to decide between a 25 year or a 30 year $200,000 mortgage amount at an rate of 4%.a. What is the monthly payment on the 25-year mortgage, to the nearest cent? b. What is the total interest paid on the 25-year mortgage? c. What is the monthly payment on the 30-year mortgage? d. What is the total interest paid on the 30-year mortgage? e. How much more interest is paid on the 30-year loan? Round to the nearest dollar. f. What is the difference between the monthly payments of the two different loans? Round to the nearest dollar.(SM7-3:6) Tom and Gwen have an adjusted gross income of $144,112. Their monthly mortgage payment for the house they want would be $1,483. Their annual property taxes would be $9,330, and the homeowner’s insurance premium would cost them $1,099 per year. They have a monthly $444 car payment, and their credit card monthly payment averages $4,021. a. Based on the front-end ratio, would the bank lend them $220,000 to purchase the house they want? Explain your answer. b. Based on the back-end ratio, would the bank lend them $220,000 to purchase the house they want? Explain your answer. (SM7-4:5) The bank approved Sylvie for a $250,000, 15-year mortgage with an APR of 3.95%. a. What is her monthly payment? b. How much interest would she expect to pay on the loan in the first month? c. How much of that monthly payment will go toward the principal?(SM7-4:9) Show your work. Examine the loan amortization table for months 92–95 of a $200,000, 8-year mortgage with an APR of 5.025%. Determine the amounts missing in the table.Payment # or DateBeginning BalanceMonthly PaymentMonthly InterestMonthly PrincipalEnding Balance9212,514.1852.402,481.979310,032.2142.012,492.367,539.859431.572,502.805,037.05955,037.052,513.282,523.77 Define Equity and give its formula. ................
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