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BEFORE ATTEMPTING THIS ASSIGNMENT BE SURE TO READ THE POWER POINTS AND WATCH THE VIDEOS ON HOW TO BUY A HOUSE. 1.Tom and Nancy want to buy a house in a particular neighborhood. they have two children ages 1 and 4. The average price home in this neighborhood runs about $300,000. Together their family income is $150,000. They have saved $75,000. The home they want to purchase costs $300,000. Taxes on the home run $3.00 per $100 of assessed value of the home. For new homes the assessed value is equal to 50% of the purchase price in this county. Insurance runs half of one percent of the purchase price of the home. An Adjustable Rate Mortgage (ARM) requires a 10% down payment. Conventional loans require 20% down payment. Compute the per month cost including interest, taxes and insurance (use above formula to get the taxes and insurance cost) if they chose to take out an ARM loan. ARM loan is 3.5% with a 5-year adjustable rate. 2. If they are currently renting a three-bedroom apartment for $1,750 per month. Just based on cost of renting vs. cost of buying with the above ARM, which would be cheaper and by how much per month? (20 points)