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A Homeowner Is Looking to Buy a Home in Marvin

Question 42

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A homeowner is looking to buy a home in Marvin Gardens. The most he can afford to pay in total is $1,800 per month. Yearly property taxes will be about $3,000 (escrowed monthly)and insurance is $110 per month. There are no other costs.
If mortgage rates are 6.25 percent for a 30-year fixed-rate mortgage,how large can his mortgage be?

Correct Answer:

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Max monthly payment = $1,800 −...

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