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kaplan MM255 unit 8 assignment




Question;Directions for Submitting Your Instructor Graded;Assignment;You must show your work on all;problems. You may type your answer right into this document. Total;points for project: 45 points. Projects must be submitted as a Microsoft;Word document and uploaded to the Dropbox for Unit 8. All Projects are due by;Tuesday at 11:59 PM ET of the assigned Unit. NOTE: Project problems;should not be posted to the Discussion threads. Questions on the project;problems should be addressed to the instructor by sending an email or by;attending office hours. You will be able to come back to the Dropbox and view your graded;work or in the Gradebook after your instructor evaluates it.;Project;Get started on the assignment by watching theShould I Buy a;House?video on the;link below then answer the following questions.;;Joe;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.;What you know;?;The 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;$439.00;?;15-year mortgage interest rate of 5.25% and a monthly payment of;$575.00;?;Down payment: 5% minimum;?;Taxes last year were $375.;?;Insurance is $250 per year.;What you are looking for;1.;Can Joe afford the monthly payments with taxes and insurance for;either a 30 or 15 year mortgage?;2.;If Joe buys the house, will he have enough money left over on a;monthly basis to live comfortably?;3.;Does Joe have enough in savings to pay for the down payment and;all of the closing costs?;Solution Plan;Complete the following questions based upon;the information in the video and other information provided in the worksheet.;1.;Joe 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?;2.;How much would Joe?s wages be in an average month?;3.;Based 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?;4.;If Joe?s net income after taxes each month is equal to 74% of his;gross wages, how much is his net income?;5.;Joe?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?;6.;After 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?;7.;Make 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?;8.;Complete the Good Faith Estimate to see if Joe has enough money in;savings for the down payment and closing costs;Description of Fee;Amount of Fee;Extended Amount;Down;Payment;5% of;purchase price;Loan;Origination Fee;No fee;at this bank;Points;No;points on this loan;Appraisal;Fee;$400;Credit;Report;$50;Insurance?First;Year Premium;$250;Mortgage;insurance;$45;(one month);Escrow;Account Insurance reserve;Insurance;for two months ($250 / 12) * 2;Escrow;Account Tax reserve;Property;Taxes for two months($375 / 12) * 2;Attorney;fees;Buyer?s;choice. None here.;Title;Insurance;$700;Processing/Underwriting;$100;Document;Preparation and Recording Fees;$250;Survey;$125;Tax;Service;$50;Flood;Certification;$20;Title;Co. Fee;$150;Pre-paid;Interest;Depends;on closing date: Estimate $150.00;Total;Due at Closing;What is your conclusion? Summarize your findings.


Paper#60992 | Written in 18-Jul-2015

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