The Tremblays have been preapproved by their bank to enter the housing market with a mortgage interest...

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The Tremblayshave been preapproved by their bank to enter the housing marketwith a mortgage interest rate of 8.6%. They have $30,000 set asidefor a down payment. They have also calculated that they can afforda monthly payment of $1,350. They have narrowed their search tothree houses and are hoping that financial constraints will narrowtheir choices. The three houses will cost the following amounts:$150,000, $270,000, and $400,000. The bank will add $50 to eachmortgage payment if they put less than 20% down and an additionalfee of $50 more to each payment if they put less than 10%down.
Which of these houses can theyafford with a 30-year mortgage?
Which of these houses can theyafford with a 15-year mortgage?

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SolutionLook at the tables below I have answered the question in theform of a table You need Microsoft excel or financial calculatorto solve this problem I used excel for this I have given formulaein the second column of the sheet I will explain on scenariotaking House 2 for 30 year mortgage and I will calculate See Answer

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The Tremblayshave been preapproved by their bank to enter the housing marketwith a mortgage interest rate of 8.6%. They have $30,000 set asidefor a down payment. They have also calculated that they can afforda monthly payment of $1,350. They have narrowed their search tothree houses and are hoping that financial constraints will narrowtheir choices. The three houses will cost the following amounts:$150,000, $270,000, and $400,000. The bank will add $50 to eachmortgage payment if they put less than 20% down and an additionalfee of $50 more to each payment if they put less than 10%down.Which of these houses can theyafford with a 30-year mortgage?Which of these houses can theyafford with a 15-year mortgage?

The Tremblayshave been preapproved by their bank to enter the housing marketwith a mortgage interest rate of 8.6%. They have $30,000 set asidefor a down payment. They have also calculated that they can afforda monthly payment of $1,350. They have narrowed their search tothree houses and are hoping that financial constraints will narrowtheir choices. The three houses will cost the following amounts:$150,000, $270,000, and $400,000. The bank will add $50 to eachmortgage payment if they put less than 20% down and an additionalfee of $50 more to each payment if they put less than 10%down.

Which of these houses can theyafford with a 30-year mortgage?

Which of these houses can theyafford with a 15-year mortgage?