Case Study—Maya and John

Paper instructions:
Please read the case study through the following assignment link and use the reading materials (the lecture notes especially) and online resources to complete the analysis.

Note: If you choose a townhouse/condo, remember to take HOA fee into consideration.

Case Study—Maya and John

Show your work for full credits

Maya and John start looking for a place to buy in the Valley. Read their Income and Expenses Statement for more information.

Calculate maximum monthly housing expenses and maximum debt they can carry based on 42% back-end ratio.
Calculate maximum monthly housing expenses based on 28% front-end ratio.
Assume they will apply for 30 year fixed mortgage with 4.5% interest. Assume property tax is 1% of house price and Homeowners insurance is 0.6% of house price. Assume they have saved $60,000 for home purchase. Assume loan origination fee is 0.8% of loan amount and closing cost is 7,000. Figure out mortgage amount they can qualify for, maximum house purchase price and expenses breakdown. Use Mortgage Qualifier calculator on www.dinkytown.net.
Help Maya and John find a real housing unit they can afford on Zillow or Redfin website, post the picture from the website or provide the URL link to the website where you find the house.
Suppose that they are going to buy the house you suggested; and they are willing and able to put 20% as the down payment, what would be the amount of that down payment and the amount of the mortgage loan?
Maya and John want to take out a 30-year fixed mortgage. Assuming they can get a mortgage rate of 4.5 percent. Estimate their monthly payment using Mortgage Loan calculator on www.dinkytown.net.
This doesn’t need to be a long essay. Answer the six questions, which involve mostly calculations. Show your work of how to get the numbers. Remember, if you use an online resource to come out with the numbers, make sure to reference the source and indicate how you get the results.

Write down your input in each box on the calculator or attach the report to receive points.

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