part 3 math project

Mortgage, Monthly Payments, and Analysis

When you apply for a mortgage, the lender will assess your ability to pay back the loan. The lender will look for collateral (assets), which could cover the loan in case of default. As a future homeowner, you also want to make sure you can save for the future. There will be documents you need to submit to the mortgage company for approval.

1. Determine Documents for Mortgage Pre-Approval

In 2-3 sentences, describe the documents you will need to submit to the mortgage company for a mortgage approval.

1. Research Houses of Interest

Use Zillow.com or Realtor.com to research 5 houses currently for sale that you would be interested in buying. Be sure to look in the city and state you are interested in and fill out the table below.

1. Calculate Monthly Payment

Calculate the monthly payment for each house based on a 30-year loan with a 5% interest rate and a down payment of $5,000. Use the following website to help you calculate the monthly payments. https://www.calculatorsoup.com/calculators/financial/loan-calculator.php

1. Calculate Housing Ratio

Financial experts recommend your monthly housing costs should not exceed 20% of your take-home (net) pay.

1. Calculate the housing ratio for each house. Show the complete breakdown of your work.

1. In 1-2 sentences, determine which houses are within your budget (remember, the housing ratio should be 20% or lower to be considered within budget).

1. Calculate Total Amount Paid and Interest

Choose one house that is within your budget that you would like to purchase.

1. Calculate the total amount paid over the 30 years. Show the complete breakdown of your work.

2. Calculate the total amount of interest paid. Show the complete breakdown of your work.

1. Calculate Closing Costs

Before taking ownership of your new house, you will need to pay closing costs. Closing cost fees will be approximately 5% of the list price of the house you are purchasing. Calculate the closing costs for the house you chose in part (e). Show the complete breakdown of your work.

1. Financial Analysis

Determine if you think you are ready to apply for a mortgage today, within 2 years, or more than 5 years in the future. Explain your answer in 3 – 4 sentences.