Questions from Personal Finance

Q: Insurance. Justin’s new FHA mortgage is for $131,500

Insurance. Justin’s new FHA mortgage is for $131,500. How much will his overall mortgage increase with an upfront fee of 1.5%? How much will his total mortgage be with the upfront PMI fee added? Will...

Q: What are settlement options? Which option should you choose?

What are settlement options? Which option should you choose?

Q: Dorothy and Matt are ready to purchase their first home. Their

Dorothy and Matt are ready to purchase their first home. Their current monthly cash inflows are $4,900, and their current monthly cash outflows are $3,650. Their rent makes up $650 of their cash flows...

Q: Larry and Laurie have found a home and made a $125

Larry and Laurie have found a home and made a $125,000 offer that has been accepted. They make a down payment of 10%. Their bank charges a loan origination fee of 1% of the loan and points of 1.5% (bo...

Q: Lloyd and Jean are considering purchasing a home requiring a $75

Lloyd and Jean are considering purchasing a home requiring a $75,000 mortgage. The payment on a 30-year mortgage for this amount is $498.97. The payment for a 15-year maturity is $674.12. What is the...

Q: This month you made a mortgage payment of $700, of

This month you made a mortgage payment of $700, of which $600 was an interest payment and $100 a payment of the loan principal. You are in the 25% marginal tax bracket. What are the tax savings as a r...

Q: Teresa rents her apartment for $650 per month, utilities not

Teresa rents her apartment for $650 per month, utilities not included. When she moved in, she paid a $700 security deposit using money from her savings account that was paying 3% interest. Her renter’...

Q: Matt has found a condominium in an area where he would enjoy

Matt has found a condominium in an area where he would enjoy living. He would need a $5,000 down payment from his savings and would have to pay closing costs of $2,500 to purchase the condo. His month...

Q: Matt (from problem 7) paid mortgage interest of $4

Matt (from problem 7) paid mortgage interest of $4,330 during his first year in the condo. His property taxes were $600, and his homeowner’s insurance was $460. If Matt is in a 25% marginal tax rate b...

Q: If the cost of refinancing their house is $3,860

If the cost of refinancing their house is $3,860, how long would Doug and Lynn (from problem 9) have to remain in their home to recover the cost? (Ignore any interest on the savings in answering this...