Question: The Freemans have decided to build a new house. The contractor quoted them a price of $135,700. The taxes on the house will be $3450

The Freemans have decided to build a new house. The contractor quoted them a price of $135,700. The taxes on the house will be $3450 per year, and homeowners’ insurance will be $350 per year. They have applied for a conventional loan from a local bank. The bank is requiring a 25% down payment, and the inter-est rate on the loan is 9.5%. The Freemans’ annual income is $64,000. They have more than 10 monthly payments remaining on each of the following: $218 on a car, $120 on new furniture, and $190 on a camper. Their bank will approve a loan that has a total monthly house payment of principal, interest, property taxes, and homeowners’ insurance that is less than or equal to 28% of their adjusted monthly income. Determine

(a) The required down payment.

(b) 28% of their adjusted monthly income.

(d) their total monthly payment, including insurance and taxes.

(e) Do the Freemans qualify for the mortgage?

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