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Math OER
 Turn In Problems 
 Personal Finance Decisions — Mortgages 

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1. Brenda can afford to spend $900 per month on mortgage payments, with a 30-year loan. Currently mortgage rates are 5% per year. What price home can she afford?

$48,000 $60,000 $150,000 $168,000

2. Brenda gets a loan with a 25% downpayment. What will be the size of Brenda's actual mortgage and monthly payment?

$67,000 mortgage and $356.12 monthly payment
$126,000 mortgage and $675.36 monthly payment
$168,000 mortgage and $900.00 monthly payment
$210,000 mortgage and $1,125.60 monthly payment

3. Brenda's loan has a 2% mortgage fee, first month pre-paid, and $1,000 other up-front costs. What is the total of her downpayment and these other up-front costs?

$46,195 $46,420 $47,035 $47,260

4. Zane has an annual income of $65,000. He wants to spend 30% of his income on a mortgage, with a 15-year loan. The interest rate is 5%. What price home can he afford?

$205,000 $216,000 $246,000 $260,000

5. Zane gets a loan with a 15% downpayment. What will be the size of his actual mortgage and monthly payment?

$162,000 mortgage and $1,281.42 monthly payment
$174,250 mortgage and $1,378.32 monthly payment
$183,600 mortgage and $1,452.28 monthly payment
$205,000 mortgage and $1,625.00 monthly payment

6. Zane's loan has a 4% mortgage fee, first month pre-paid, and $1,300 other up-front costs. What is the total of his downpayment and these other up-front costs?

$37,642 $40,398 $41,872 $43,345

7. Does doubling the monthly payment double the size of the other numbers? Consider the Moneybag family that has initially budgets $2,200 per month on a mortgage, with everything else the same as the Wahl family. Do the other numbers (except for the fixed "other up-front costs") double?

Yes, the other numbers double
No, the other numbers do not double

8. Does halving the length of time halve the size of the other numbers? Consider the Short family that uses a 15 year loan for their mortgage, with everything else the same as the Wahl family. Do the other numbers (except for the fixed "other up-front costs") halve?

Yes, the other numbers halve
No, the other numbers do not halve

9. Does halving the interest rate halve the size of the other numbers? Consider the Timing family that uses a 3% interest for their mortgage, with everything else the same as the Wahl family. (Their Amortization Table value is $4.22.) Do the other numbers (except for the fixed "other up-front costs") halve?

Yes, the other numbers halve
No, the other numbers do not halve

10. Does doubling the interest rate double the size of the other numbers? Consider the Calamity family that uses a 12% interest for their mortgage, with everything else the same as the Wahl family. (Their Amortization Table value is $10.29.) Do the other numbers (except for the fixed "other up-front costs") double?

Yes, the other numbers double
No, the other numbers do not double