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What down payment will she need

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Zara wants to buy a house. The house she wants is listed for $400,000, and she wants to avoid PMI insurance. She can get a fixed rate mortgage at 3.15% for 30 years. Don't worry about taxes and insurance for any of these questions, just keep in mind that those would need to be considered as well.

a. What down payment will she need? (show your work)

b. If Zara makes her down payment and takes out the loan described, what will be her monthly payment?

c. If Zara makes her down payment and takes out the loan described, what will be the total cost of the house?

d. What would be the total cost of the house if she took out a 15-year mortgage at 2.75%?

e. What if Zara can only pay a 15% down payment, what would her first monthly payment be for the 30-year mortgage at 3.15%? (For this example, the PMI insurance cost is 1% of the initial loan amount per year.)

Reference no: EM132566475

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