Hillary would like to purchase a 125000 home and is, Ask an Expert

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Hillary would like to purchase a $125,000 home, and is planning on making a $25,000 down payment for a 7.5 percent, 30-year, fixed-rate mortgage.

a) What is the required monthly principal and interest payment on this mortgage?

b) What is Hillary's loan-to-value ratio? Will a lender likely require her to obtain PMI? Explain.

c) Hillary's income is $3,450 per month. She also has the following monthly expenses:

Hazard insurance $50

Property taxes $100

Auto payment $150

Credit cards $ 50

Monthly utilities $175

Student loan $350

Calculate Hillary' s front-end and back- end ratios.Given these figures, will Hillary meet the income guidelines for a conventional for a conventional mortgage? Explain.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92086536

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