Name: ___________________________________________________________________________________________
You work a job with an annual salary of $60,000. You want to buy a house with a down payment of 20%. Go online to find a property that you can afford and interest rates for mortgages. When you show work, write down the formula used then plug in numbers. Write legibly, use complete sentences, and use correct spellings and punctuation. For online sources, give the full URL and print off a copy of the page sourced. Round to the nearest cent.
1. Find how much you make per month. Show work. _______________________________________________________
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2. Find out how much you can afford per month for a mortgage. Show work.____________________________________
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3. Why is the answer to question 2 reasonable? Explain. ____________________________________________________
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4. Interest rate and how many years the mortgage is for: ____________________________________________________
5. Online source for 4: _________________________________________________________________________
6. House price: _____________________________________________________________________________________
7. Yearly property taxes on house: _____________________________________________________________________
8. Online source for 6 and 7: ____________________________________________________________________
9. Find the monthly property taxes on house. Show work. ___________________________________________________
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10. Assume an insurance rate of 1% of the house price per year. Find the yearly insurance. Show work: ______________
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11. Find the monthly insurance on the house. Show work: ___________________________________________________
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12. Down payment on house. Show work: ________________________________________________________________
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13. List 3 assumptions that you make about this purchase. After each, explain why the assumption is important.
A. _________________________________________________________________________________________
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B. _________________________________________________________________________________________
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C. _________________________________________________________________________________________
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14. Amount of house price (#6) that will be mortgaged. Show work: __________________________________________
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15. Monthly mortgage payment. Show work: _____________________________________________________________
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16. Find the PITI (monthly payments, including mortgage, taxes, and insurance). Show work: _______________________
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17. Find the total amount paid over the life of the mortgage, using the principal and interest only. Include the down
payment. Show work: ________________________________________________________________________________
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18. Find the total interest on mortgage. Show work: _______________________________________________________
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19. Is the PITI reasonable and sustainable, given your salary? Consider taxes and insurance. Explain: ________________
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