The total first-year cost when purchasing the home is a) 37,041.84.
What is a mortgage cost?
The mortgage cost includes the principal, interest, taxes, and insurance costs.
While the principal repayment pays down the outstanding mortgage loan, the interest is the borrowing or finance cost.
The interest amount depends on the interest rate and the mortgage loan balance.
Data and Calculations:
List price = $150,000
Down payment = $30,000
Mortgage loan = $120,000 ($150,000 - $30,000)
Mortgage period = 30 years
Interest rate = 4.2%
Annual mortgage payment = $7,041.84 (determined using an online finance calculator as follows)
First-year cost for purchasing the home = $37,041.84 ($7,041.84 + $30,000)
Home Price = $150,000
Down Payment = $30,000
Loan Term = 30 years
Interest Rate = 4.2%
Results:
Monthly Pay: $586.82
Annual payment = $7,041.84 ($586.82 x 12)
House Price $150,000.00
Loan Amount $120,000.00
Down Payment $30,000.00
Total of 360 Mortgage Payments $211,255.42
Total Interest $91,255.42
Mortgage Payoff Date Jun. 2052
Question Completion:
The home for sale is listed at $150,000.00. They have $30,000.00 for a down payment and are qualified for a fixed-rate 30-year mortgage with an annual interest rate of 4.2%. • The rental home is currently 8900.00 per month, with rent expected to increase by approximately $75.00 every year.
Thus, the total first-year cost when purchasing the home is a) 37,041.84.
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