Loan Project: Buying A House For This Assignment You Will An

Question

Loan Project Buying A Housefor This Assignment You Will Analyze A Ho Find a description, asking price, and real estate taxes of a house for sale, and decide on a purchase price you would be willing to pay (assuming you have the means). Find a current market interest rate for a 30-year fixed-rate mortgage having a down payment of 20 percent of the purchase price. Compute the down payment, amount financed, and the monthly mortgage payment (showing how to use the appropriate financial formula). Compute the monthly amount of real estate taxes and add to the monthly mortgage payment to get the total monthly amount paid. Suppose that in order to qualify for the loan, the total monthly amount paid cannot exceed 30 percent of monthly income. What is the minimum monthly income needed to qualify for the loan? What is the minimum annual income needed? (Note: This is a simplified minimum income requirement calculation, for the purposes of this project, as it does not take into account other costs such as insurance or other loans or assets currently held.) Construct an amortization table (using spreadsheet software or online resources such as ). Assume that the first payment is made in January of the current year. Find the month and year of the last payment. Find the date of the first month when the amount applied to the principal exceeds the amount of interest paid. How many of the 360 payments have been made at this point? Assuming that the mortgage is held for the full 30 years, compute the total principal paid and the total interest paid. Your report must include · name of project and your name · house's description, asking price, and real estate taxes, the purchase price, and the current market interest rate (include references) · computations and answers for tasks 2, 3, and 4, amortization table for task 5, answers for task 6, and computations and answers for task 7 · conclusion (a paragraph summary describing the results you found to be particularly interesting, and why)

Dr. Jack HW Helper · Accepted Answer

Introduction This project aimed to analyze a real estate mortgage scenario, focusing on determining financial feasibility and understanding mortgage amortization. For this purpose, a hypothetical house was selected, and calculations were performed to understand payment structures, income requirements, and loan amortization over the 30-year term. The following sections detail the house selection, financial calculations, amortization schedule, and interpretative insights derived from the analysis. House Description and Financial Data The chosen house is a three-bedroom, two-bath property located in a suburban neighborhood. It was listed for sale at an asking price of $350,000. The property’s annual real estate taxes are estimated at $4,200, based on local tax rates. The current market interest rate for a 30-year fixed-rate mortgage is 6.5%, according to recent mortgage rate surveys (Freddie Mac, 2024). A down payment of 20% of the purchase price was considered, in line with typical lending standards. Financial Calculations Based on the asking price, the down payment was calculated as 20%, which equals $70,000. Consequently, the amount financed (loan principal) is $280,000. Using the mortgage formula for a fixed-rate loan: $$M = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}$$ where P is principal, r is monthly interest rate, and n is total number of payments, the monthly mortgage payment was determined to be approximately $1,775. Adding monthly real estate taxes of $350 ($4,200 annually divided by 12 months), the total monthly payment rises to approximately $2,125. Income Qualification Analysis To ensure the monthly payment does not exceed 30% of income, the minimum monthly income required is calculated as: $$ \text{Income} = \frac{\text{Total monthly payment}}{0.3} = \frac{2125}{0.3} \approx \$7,083\text{/month}$$ $$ \text{Annual income} = 7,083 \times 12 \approx \$85,000 $$ Thus, the borrower should have a minimum annual income of approximately $85,000 to qualify for thi

Loan Project: Buying A House For This Assignment You Will An

Loan Project Buying A Housefor This Assignment You Will Analyze A Ho

Paper For Above instruction

Introduction

House Description and Financial Data

Financial Calculations

Income Qualification Analysis

Amortization Schedule

Total Principal and Interest Paid

Conclusion

References