Selecting and Financing House Case Questions

Questions 

1. Using Your Personal Finamcial Plan sheet 22. compare the advantages and the disad- vantuges of renting a home or apartment to those af purchasing a home. 

2. Jamie Lee and Ross are estimating that they will be putting S40.000 from their savings account toward a down payment on their home purchase. Using the traditional finan- cial guideline suggestion of “two and a half times your salary plus your down pay- ment.” calculate approximately how much Jamie Lee and Ross can spend on a house.

3. Using Your Personal Financial Plan sheet 24, calculate the affordable mortgage amount that would be suggested by a lending institution based on Jamie Lee and Ross’s income. How does this amount compare with the traditional financial guideline found in Question 2? Use the following amounts for Jamie Lee and Ross’s calculations: 10 percent doWII payment. • 28 percent for TIPI $500.00 per month for estimated combined property taxes and insurance. 5 percent interest rate for 30 years (see Exhibit 7-7). 

4. Jamie Lee and Ross found a brand-new three-bedroom, 25-bath home for sale in a quiet neighborhood. The listing price is $275,000, They placed a bid of $260,000 on the home, The seller’s counteroffer was S273,000. What should Jamie Lee and Ross do next to demonstrate to the owner that they are serious buyers? 

5. Jamie Lee and Ross received a signed contract from the seller accepting their $273.000 offer! The seller also agreed to pay two points toward Jamie Lee and Ross’s mortgage. Calculate the benefit of having points paid toward the mortgage if Jamie Lee and Ross are putting a $40,000 down payment on the home: 

6. Calculate Jamie Lee and Ross’s mortgage payment, using the 5 percent rate for 30 years on the mortgage balance of $233,000.