A home mortgage payment is heavily influenced by the

A home mortgage payment is heavily influenced by the buyer’s after-tax annual income, as well as his or her available funds for a down payment and credit score. For this mini-project, you will determine these baseline components by rolling a single, six-sided die. If you do not have a six-sided die, you can use the dice roll simulator to complete this section. Record the results of your rolls below.

Roll 1: Your first role will be used to determine your after-tax annual income:

2 x $20,000 = total after-tax annual income

Roll 2: Your next role will be used to determine the amount available for a down payment:

3 x $20,000 = total available for down payment

Roll 3: Your third roll will be used to determine your FICO credit score range (and APR):

Number Rolled

Credit Score Range

Expected APR*

1

620-639

5.063%

2

640-659

4.518%

3

660-679

4.09%

4

680-699

3.876%

5

700-759

3.699%

6

760-850

3.478%

*according to FICO (myFICO.com); based on a 30-year fixed-rate mortgage

Roll 3 = credit score range and expected APR

The Calculations

Credit will not be given unless you provide the formula(s) you used, the values you plugged in, and your final answer.

  1. Your down payment should be at least 20% of the purchase price of the home. Based on the amount available for a down payment, what is the most expensive home that you can purchase?