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Home / Questions / a. Fatima and Usamah plan to buy a condominium in New York. They will obtain a $150,000, 3...

a. Fatima and Usamah plan to buy a condominium in New York. They will obtain a $150,000, 30-year mortgage at 6 percent. Their annual property taxes are expected to be $1,800. Property insurance is

a. Fatima and Usamah plan to buy a condominium in New York. They will obtain a $150,000, 30-year mortgage at 6 percent. Their annual property taxes are expected to be $1,800. Property insurance is $480 a year, and the condo association fee is $220 a month. Based on these items, determine the total monthly housing payment for the Fatima and Usamah?

[Always remember: show ALL the calculation steps/processes. Less mark will be given if you failed to show the calculation]

Rental Costs

Buying Costs

Annual rent, $7,500

Insurance, $150

Security deposit, $750

Annual mortgage payments, $10,000 ($9,500 is interest)

Property taxes, $1,500

Insurance/maintenance, $1,000

Down payment/closing costs, $4,500

Growth in equity, $250

Estimated annual appreciation, $1,800

Assume an after-tax savings interest rate of 6 percent and a tax rate of 30 percent.

Based on the above information, answer the following questions

a. Calculate total rental costs!

b. Calculate total buying costs!

c. Would you recommend buying or renting? Why?

Apr 14 2021 View more View Less

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