Reference no: EM133046959
Question - Lam and Cara, work for the Town of Bracebridge, with an annual gross salary of $40,000 each. The expected annual salary increase is 2.5%.Below is a list of their assets and liabilities.
Lam and Cara want to purchase a new house costing $320,000. They qualify for a 3-year fixed term mortgage at 5.75% with a 20-year amortization period. Property taxes on the new house is $3,600 per year.
The market price for their current house is $247,900, with legal fees, real estate and land transfer fees totaling $7,500. They hope the net proceeds from the sale of the current house, will give them at least $80,000, which would be used as a down payment for the new house.
If the net proceed is less than $80,000, they will use their cash savingsto ensure that the down payment is $80,000.
Case study instructions and questions:
1. Will Lam and Cara have the $80,000 down payment needed from the sale of the current residence?
2. What is the monthly mortgage payment on the new house, assuming they have the $80,000 down payment? Will they qualify for the new mortgage loan? (Hint: include GDS and TDS calculation)
3. Suppose Lam and Cara have a provision in their new mortgage agreement, that allows a mortgage renewal in three years atcurrent rate, and then at five years, by making a payment of $20,000 three years from today and $25,000 eight years from today. If the monthly payment remains the same, how long will it take them to pay off the new mortgage?
4. Lam and Cara is considering another alternative. Instead of buying a new house, they should get a home equity line of credit for $55,000, which has 4% interest and a minimum monthly payment that is twice the interest payment. The $55,000 will be use to purchase a condominium that will have a conventional mortgage. Would they be qualified for the home equity line of credit? What would be the maximum purchase price for the condominium (ignore legal and real estate fees)?
|
Describe the religious-political and sociological factors
: Be prepared to describe the religious, political, and sociological factors that may have influenced this drama
|
|
Influencing healthcare policy
: "Organization" is a broad term that encompasses multiple professional entities, which in the case of healthcare includes, but is not limited to, hospitals, IDN'
|
|
What is the operating cash flow for this project
: Ernie's Electrical is evaluating a project that will increase sales by $100,000 and costs by $70,000. What is the operating cash flow for this project
|
|
What led marriott to enter into relationship with tripadvior
: As technology has changed the way consumers search for and book hotels, hotel loyalty programs also have evolved. Road warriors, those who travel extensively fo
|
|
What is the monthly mortgage payment on the new house
: What is the monthly mortgage payment on the new house, assuming they have the $80,000 down payment? Will they qualify for the new mortgage loan
|
|
Police brutality in united states
: What are the measures that can be taken to address the issue of police brutality in the United States?
|
|
How would you adapt your business to the labor shortage
: Assume you've tried several strategies to attract workers to your cafe, but you're still short-staffed. How would you adapt your business (e.g., marketing, oper
|
|
Define hofstede five value dimensions
: Define Hofstede's five value dimensions that analyze and interpret behaviors, values, and attitudes.
|
|
Society and economics sustainability
: What effect these actions will have on Society and Economics Sustainability? What measures Government should also take to encourage corporate citizens for these
|