Margo, age 59, wants to get a mortgage loan from the bank to purchase a new...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Margo, age 59, wants to get a mortgage loan from the bank to purchase a new home in St. Augustine, Florida. She has a very successful business that she manages online from home and currently lives in a condo in Scottsdale, Arizona. Her income is currently $130,000 dollars a year. Since she needs to help her mother, who currently rents a home in St. Augustine, Florida, she is planning a move there in the next 2 months. She has lived in her condominium for 10 years and has a remaining mortgage balance of $150,000. Over the last 3 years, she has seen the value of her condominium go from her purchase price of $300,000 to be worth $360,000 today. The equity in her current home minus closing costs (estimated to be around $27,000) and moving expenses (estimated to be around $5,000) represent the down payment for her new home in Florida. Since she wants to also move her mother into the prospective home in St. Augustine, she is looking for at least 1,700 square feet of space and at least 3-4 bedrooms and 2.5 baths. In about 5 years, she plans to semi-retire since her savings and investments only total about $300,000. She has a car that she has paid off in the last 5 years, and her FICO score is 700. • Determine what property she should purchase if she wants to be fairly near shopping and amenities in St. Augustine, and have enough space while respecting her need to semi-retire in the coming years. You can use a common real estate website to explore options. • Describe the property you recommend to the client based on their needs. • Explain the type(s) of mortgage(s) the client would quality for. • Then recommend which mortgage type the client should apply for based on your calculations of the housing-to-expense ratio and the debt-to-income ratio. . Show your calculations for the housing-to-expense ratio. Show your calculations for the debt-to-income ratio. Margo, age 59, wants to get a mortgage loan from the bank to purchase a new home in St. Augustine, Florida. She has a very successful business that she manages online from home and currently lives in a condo in Scottsdale, Arizona. Her income is currently $130,000 dollars a year. Since she needs to help her mother, who currently rents a home in St. Augustine, Florida, she is planning a move there in the next 2 months. She has lived in her condominium for 10 years and has a remaining mortgage balance of $150,000. Over the last 3 years, she has seen the value of her condominium go from her purchase price of $300,000 to be worth $360,000 today. The equity in her current home minus closing costs (estimated to be around $27,000) and moving expenses (estimated to be around $5,000) represent the down payment for her new home in Florida. Since she wants to also move her mother into the prospective home in St. Augustine, she is looking for at least 1,700 square feet of space and at least 3-4 bedrooms and 2.5 baths. In about 5 years, she plans to semi-retire since her savings and investments only total about $300,000. She has a car that she has paid off in the last 5 years, and her FICO score is 700. • Determine what property she should purchase if she wants to be fairly near shopping and amenities in St. Augustine, and have enough space while respecting her need to semi-retire in the coming years. You can use a common real estate website to explore options. • Describe the property you recommend to the client based on their needs. • Explain the type(s) of mortgage(s) the client would quality for. • Then recommend which mortgage type the client should apply for based on your calculations of the housing-to-expense ratio and the debt-to-income ratio. . Show your calculations for the housing-to-expense ratio. Show your calculations for the debt-to-income ratio.
Expert Answer:
Answer rating: 100% (QA)
Here are my recommendations for Margo based on her situation Property to Purchase I would recommend ... View the full answer
Related Book For
Taxation For Decision Makers 2019
ISBN: 9781119497288
9th Edition
Authors: Shirley Dennis Escoffier, Karen A. Fortin
Posted Date:
Students also viewed these finance questions
-
Bill and Fiona Russell have always enjoyed craft beer, and in recent years have started making small batches at home. As they experimented, they mastered several niche recipes including a key lime...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Two bars AB and BC of negligible weight are attached to a single spring of constant k that is unstretched when the bars are horizontal. Determine the range of values of the magnitude P of two equal...
-
(Lamperti20) An urn contains exactly 5000 balls, of which an unknown number X are white and the rest red, where X is a random variable with a probability distribution on the integers 0, 1, 2, . . . ,...
-
The paper Good for Women, Good for Men, Bad for People: Simpsons Paradox and the Importance of Sex Specific Analysis in Observational Studies (Journal of Womens Health and Gender Based Medicine [...
-
Outline the general strategy used in metagenomics.
-
Orwell Company accumulates the following adjustment data at December 31. 1. Services provided but not recorded total $1,420. 2. Supplies of $300 have been used. 3. Utility expenses of $225 are...
-
As an example of how simulation can be used for operations research, consider the following college enrollment model. A certain college wants to analyze the effect of admissions and freshman...
-
It is the end of year 2021. A company XYZ has projected free cash flow to equity $10, $20, $22 per share at the end of year 2022, 2023 and 2024. Projected growth rate after year 2023 will be...
-
Task 2: Sourcing Decision for NVIDIA Description: NVIDIA is headquartered in Santa Clara, California, and became a major force in the computer gaming industry with the launch of the RIVA series of...
-
Describe the Most Essential Qualities of an Effective Leader and describe the style and qualities one would need in times of critical organizational change.
-
Holly purchased a house for $325,000. She made a down payment of 25.00% of the value of the house and received a mortgage for the rest of the amount at 5.72% compounded semi-annually amortized over...
-
Fowler is expected to pay a dividend of $1.61 one year from today and $1.76 two years from today. The company has a dividend payout ratio of 40 percent and the PE ratio is 17.95 times. If the...
-
The unadjusted trial balance of Fernville Inn Company at December 31, 2024, and the data needed for the adjustments follow. Requirements 1. Journalize the adjusting entries on December 31. 2. The...
-
What is common stock? What is the accounting effect of common stock that is issued with par value?
-
The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase...
-
Tarick Toys Company manufactures video game consoles and accounts for product costs using process costing. The following information is available regarding its June inventories. The following...
-
Jillian is an employee of Monrow Corporation (a calendar-year corporation). In February 2018, Monrow purchased a new $50,000 car for Jillians use. During 2018 and 2019, 60 percent of Jillians mileage...
-
Jewels home was completely destroyed by a wildfire in 2018 in an area declared a national disaster. The building had an appraised value of $185,000 before the fire. Four years ago Jewel paid $160,000...
-
Your client, Ted, would like your assistance in selecting one of the following assets to give to his 16-year-old daughter. The corporate stock pays only $100 in dividend income each year but has...
-
The textbook states that "data is a resource that must be controlled and managed." Explain this statement, and indicate whether you agree of not, and why.
-
Why do conventional files tend be have duplication of data?
-
One of the dealership's legacy stand-alone systems in the preceding exercise is the salesperson work schedule system. This system was developed in the 1980 s on a single \(P C\), using BASE III, to...
Study smarter with the SolutionInn App