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Activity 5.6.docx - 1 Estimating a Monthly Mortgage Payment...

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1. Estimating a Monthly Mortgage Payment. Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation (See Exhibit 9-8). Monthly gross income, $2,950 Down payment to be made, 15 percent of purchase price Other debt (monthly payment), $160 Monthly estimate for property taxes and insurance, $210 30-year loan at 8 percent Affordable monthly mortgage payment: 2950 x .38= 1,121 -160 – 210= $751 Affordable mortgage amount: $751/8.0 x 1000 = $93,875 Affordable home purchase price: 93,875/(1-.15)= $110,441.18 2. Comparing Total Mortgage Payments. Which mortgage would result in higher total
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