You are ready to buy a house, and you have $20,000 for a down payment and closing costs. Closing costs are estimated to be 4% of the loan value. You have an annual salary of $48000 (monthly income $4000) , and the bank is willing to allow your monthly mortgage payment to be equal to 25% of your monthly income. The interest rate on the loan is 6% per year with monthly compounding (.5% per month) for a 30-year fixed rate loan. How much can you offer for the house?

Answer rating: 100% (QA)

To calculate how much you can offer for the house we need to consider several factors 1 Down Payment and Closing Costs You have 20000 for the down pay... View the full answer