HACE 3200 1nd Edition Lecture 17Outline of Last Lecture I. HousingII. One-Time or Initial CostsIII. Adjustable-Rate MortgageOutline of Current LectureI. Housing (cont’d)II. Practice ProblemsCurrent Lecture- Other Mortgage Loan Optionso Balloon payment mortgage: small payments for several years, after which entire loan must be paid off in one “large balloon” paymento Graduated payment mortgage: payments steadily increase for a period of time and then level off- Selecting a Homeo The search process Use a traditional real estate agent OR use an independent or exclusive buyer-broker- Negotiating a Sales Priceo Always haggle on the actual purchase price and counterofferso Include all contingencieso Consider closing costso Offer earnest money- Signing the Sales Contracto Always have a fixed priceo Do a title searcho Make the contract contingent on receiving the proper financing These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Signing the Contract (cont’d)o Divide the utilities, insurance, taxes, and interest equitably with the sellero Stipulate the condition of the dwelling upon the transfero Include all other contingencies that may interfere with a satisfactory purchase - Calculating Mortgage Paymento Mortgage= PVAo APR= I/Y( converted to monthly if necessary)o # of payments/periods= N(converted to months if necessary)o CPT PMT= computing mortgage payment EXAM 2 LOAN AND MORTGAGE PRACTICE PROBLEMS1 Haley is buying a new car. Her bank is offering her an annual interest rate of 7.9% on a new auto loan. She will take out a loan for 84 months. The car she is buying costs $47,000. What will Haley’s monthly payment be on her new car? PVA= 47,000I/Y= 7.9/12= .6583N= 84CPT PMT= 730.212 Josh is buying his own home. His mortgage company has offered him a mortgage loan at an annual percentage rate of 8.5%. Josh is putting down 20% of the home's value as a down payment. Josh has made an offer of $156,000 for the house and the seller has accepted. Josh is taking out a 30 year fixed-rate mortgage. What will Josh's monthly mortgage payment be (excluding insurance andtaxes)? PVA= 156,000 * .8= 124,800I/Y= 8.5/12= .7083N=30 * 12= 360CPT PMT= 959.603 Tom is buying a 3rd home to use as an income source. The house will cost Tom $975,000. His mortgage interest rate is 9.7% annually. His mortgage is for 25 years. What are Tom's monthly mortgage payments? PVA= 975,000I/Y= 9.7/12= .8083N= 25 *12= 300CPT PMT= 8654.484 Jane is buying a new truck. It will cost her $33,000 Jane's credit union is loaning her the money for the truck at an annual percentage rate of 7.2% for 72 months. Calculate Jane's monthly truck payment. PVA= 33,000N= 72I/Y= 7.2/ 12= .6CPT PMT= 565.795 Calculate the monthly auto loan payments for the following loan: $122,000, 72 months, 8.2% AnnualPercentage rate. PVA= 122,000N= 72I/Y= 8.2/12= .6833CPT PMT= 2150.996 Calculate the monthly mortgage payment for the following loan: $355,000, 25 years, 8.75% APR. PVA= 355,000N= 25 * 12= 300I/Y= 8.75/12= .7292CPT PMT= 2918.617 Calculate the monthly payment for a vehicle that costs $45,000 if you finance 75% of the vehicle over 7 years at an annual percentage interest rate of 6.8%. PVA= 45,000* .75= 33,750I/Y= 6.8/12= .5667N= 7 *12= 84CPT PMT=
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