Exam 18: The Cost of Home Ownership

Joe Jay purchased a new colonial home for $260,000, putting down 20%. He decided to use Loyal Bank for his mortgage. They were offering a 6 1/2% for a 25-year mortgage. The principal after the first payment had a balance outstanding of:

Bill Moore took out an $80,000 mortgage on a ski chalet. The bank charged 4 points at closing. The points in dollars cost Bill:

An amortization schedule shows:

Tom Burke buys a home in Virginia for $139,000. He puts down 30% and obtains a mortgage for 25 years at 12%. The portion of the first payment that covers interest is:

Banks cannot provide amortization schedules to borrowers.

Lizzy Clar bought a home for $160,000, putting down $30,000. The rate of interest is 7% for 25 years. The total yearly mortgage payment is:

The total cost of interest is equal to the total of all monthly payments:

Ben Brown bought a home for $225,000. He put down 20%. The mortgage is at 6 ½% for 30 years. Using the formula or calculator, his monthly payment is:

The major portion of the monthly payment is used to pay off the principal.

A monthly payment of $850 on a 30-year $80,000 mortgage results in a total cost of interest of $226,000.

The amount of the down payment one makes on a home directly affects the size of the monthly payment.

The monthly payment on a home purchased for $150,000 with 30% down at 13% for 30 years is $1,132.53.

Points are to be paid off as part of the regular monthly payment.

A $104,000 selling price with $24,000 down at 8 1/2% for 25 years results in a monthly payment of:

Marsha Terban bought a home for $119,000 with a down payment of $19,000. Her rate of interest is 12 1/2% for 35 years. The balance of the mortgage at the end of the first month is:

Jill Diamond bought a home for $190,000 with a down payment of $65,000. The rate of interest was 7% for 35 years. Her monthly mortgage payment is:

Graduated payments let the borrower pay more at the beginning of the mortgage and make lower payments later.

The difference between the monthly payments on a $120,000 home at 6 ½% and at 8% for 25 years is:

Interest is equal to principal times rate divided by time.

Bill's monthly payment is $1,056 per month. The principal is $100,000 at a rate of 12 1/2% for 35 years. The amount of interest for Bill's first payment is $1,011.67.