Business Math Unit 7
Directions for Submitting Your Instructor Graded AssignmentYou need to use Microsoft Word for this assignment. Save your file in a location that you will remember. When you are ready to submit it, go to the Dropbox. You will be able to come back to the Dropbox and view your graded work or in the Gradebook after your instructor evaluates it.Get started on the assignment by watching the Should I Buy a House? video on the link below then answer the following questions.a hrefhttp://https://allaplusessays.com/order has decided that he is tired of paying rent and not building equity of his own. He thinks that he is ready to assume the responsibility of owning a home and has found what he believes is the perfect first home. Joe meets with the loan officer at his bank where the process of buying a home is started. The loan officer provides Joe with a great deal of information, leaving him excited and apprehensive at the same time.iWhat you know:/iThe purchase price of the house is $75,000.Joe has $10,000 in savings.Joe makes $15 per hour and works 40 hours per week.30-year mortgage interest rate of 6.25% and a monthly payment of $439.0015-year mortgage interest rate of 5.25% and a monthly payment of $575.00Down payment: 5% minimumTaxes last year were $375.Insurance is $250 per year.iWhat you are looking for:/i/polliCan Joe afford the monthly payments with taxes and insurance for either a 30 or 15 year mortgage?/liliIf Joe buys the house, will he have enough money left over on a monthly basis to live comfortably?/liliDoes Joe have enough in savings to pay for the down payment and all of the closing costs?/li/olpSolution Plan:Complete the following questions based upon the information in the video and other information provided in the worksheet./polliJoe figures that with overtime he will average 40 hours a week for 52 weeks a year. If his current wage is $15.00 per hour, how much will he make per year?/liliHow much would Joe’s wages be in an average month?/liliBased upon the information in the video, Joe has a car payment of $249 per month. The average utilities are: Electricity, $79; Gas, $49; Water, Sewer, and Trash, $27. In addition, Joe is saving $100 per month. How much of his monthly salary would be committed to utilities and other expenses?/liliIf Joe’s net income after taxes each month is equal to 74% of his gross wages, how much is his net income?/liliJoe’s total monthly payment to the bank will consist of the mortgage interest plus principal amount plus monthly payments for insurance and taxes. What will the total monthly payments be for a 15-year and a 30-year loan including taxes and insurance?/liliAfter paying for his car, utilities, and a 15-year mortgage payment how much will he have left to cover other living expenses? If he goes with a 30-year mortgage, how much will he have left over to cover living expenses?/liliMake a list of your living expenses and try to estimate monthly expenses. Does Joe have enough left over to live comfortably if he buys the house? Should he go with the 15 or the 30-year mortgage?/liliComplete the Good Faith Estimate to see if Joe has enough money in savings for the down payment and closing costs:/li/oltabletbodytrtdDescription of Fee/tdtdAmount of Fee/tdtdExtended Amount/td/trtrtdDown Payment/tdtd5% of purchase price/td/trtrtdLoan Origination Fee/tdtdNo fee at this bank/td/trtrtdPoints/tdtdNo points on this loan/td/trtrtdAppraisal Fee/tdtd$400/td/trtrtdCredit Report/tdtd$50/td/trtrtdInsurance—First Year Premium/tdtd$250/td/trtrtdMortgage insurance/tdtd$45 (one month)/td/trtrtdEscrow Account Insurance reserve/tdtdInsurance for two months ($250 / 12) * 2/td/trtrtdEscrow Account Tax reserve/tdtdProperty Taxes for two months($375 / 12) * 2/td/trtrtdAttorney fees/tdtdBuyer’s choice. None here./td/trtrtdTitle Insurance/tdtd$700/td/trtrtdProcessing/Underwriting/tdtd$100/td/trtrtdDocument Preparation and Recording Fees/tdtd$250/td/trtrtdSurvey/tdtd$125/td/trtrtdTax Service/tdtd$50/td/trtrtdFlood Certification/tdtd$20/td/trtrtdTitle Co. Fee/tdtd$150/td/trtrtdPre-paid Interest/tdtdDepends on closing date: Estimate $150.00/td/trtrtdTotal Due at Closing:/td/tr/tbody/tablebrp/p/div
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