You are a loan officer at the West Elm Savings and Loan. Mr. and Mrs. Brady are in your office to apply for a mortgage loan on a house they want to buy. The house has a market value of $160,000. Your bank requires 1/5 of the market value as a down payment.
(a)
What is the amount (in $) of the down payment? $


(b)
What is the amount (in $) of the mortgage for which the Bradys are applying? $


(c)
Your bank offers the Bradys a 30-year mortgage with a rate of 5%. At that rate, the monthly payments for principal and interest on the loan will be $5.37 for every $1,000 financed. What is the amount (in $) of the principal and interest portion of the Bradys' monthly payment? $


(d)
What is the total amount (in $) of interest that will be paid over the life of the loan? $


(e)
Your bank also requires that the monthly mortgage payments include property tax and homeowners insurance payments. If the property tax is $1,710 per year and the property insurance is $1,458 per year, what is the total monthly payment (in $) for PITI (principal, interest, taxes, and insurance)? $


(f)
To qualify for the loan, bank rules state that mortgage payments cannot exceed 14 of the combined monthly income of the family. If the Bradys earn $3,750 per month, will they qualify for this loan?


Yes, they will http://qualify.
No, they will not qualify.


(g)
What monthly income (in $) would be required to qualify for this size mortgage payment? $