Blake and Amanda have found a house, which owing to a depressed real estate market costs only $201500. They will put the $22000 down and the finance remainder with a 30-year mortgage loan from Bank of America at the 4.65% (compounded monthly).
1. Discuss how much is their monthly loan payment?
2. Discuss how much interest will they pay in the second payment?
3. They will also have the following expenses: property taxes of $2100, homeowners' insurance of $1625, and the $290 mortgage insurance (in case one of them dies before the loan is repaid, a requirement of the bank). These annual amounts are paid in 12 installments and added to the loan payment. Discuss what will Blake and Amanda's full monthly cost been? If they can afford $1200 per month, can Blake and Amanda afford the house?