special topics - buying a home

._.._. ___a- -._. ...v w_. w...a.J. Review Directions: Solve the problems below. \\ 1. Determine a reasonable purchase price for a home given the following situation: i. a) Joe earns $18 per hour for a 40 hour week. ' b) Lisa earns a $2500 monthly salary. l 0) Kevin and Diane earn a combined income of $98000 but have an automatic deduction for college loans of $286 monthly. They have saved $5000 for a down i payment. What is a reasonable amount they can afford for a home? d) A house is priced at $285000. What would a person have to earn to afford this home? 2. Nancy is going to build a house on land she inherited from her grandmother. The cost averages $150 per square foot for the house. She earns $48000 annually as a supervisor. What is the size of the house (in square feet) that she can afford to build? 3. Cynthia Desmond is buying a condominium for $169000. She must make a 20% down payment. What is the amount financed after the down payment? What are the monthly payments if the interest rate is 8.5% for 30 years? What is the amount of payment plus escrow if the annual insurance premium is $1580 and the real estate taxes are $1268? 4. The purchase price of a home is $150000. What are the total closing costs if the following fees apply? Lawyer = .5 % of purchase price title search = $300 (the buyer pays only 1/2 of this fee) Loan costs = 4 % of purchase price Recording = $65 Taxes = $1235 5. Calculate the costs of these home improvement and maintenance costs. a. The cost to install a driveway is $8.75 per square foot, plus a 10% surcharge for the cement footers. The permit charge is $1.25 per square foot. The driveway measures 18 feet by 50 feet. What is the total cost of installing this driveway? b. Annual real estate taxes on a property are $2046. Insurance premiums total $1236. Required flood insurance protection premiums are $380 annually. The ' county assesses an annual special assessment landll fee of $125. Trash collection costs $65 quarterly.~ Annual homeowners association is $720 for common area, maintenance of the subdivision. The pool company charges $45 quarterly to maintain the pool. Ongoing termite and pest protection costs $39 monthly. How much should a buyer save each month to cover these fees? Please Write Your Answer Below