Answer Happy

61. [-13 Points] DETAILS TANFIN12 5.3.056. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $200,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.) Option A: A fixed-rate mortgage at an interest rate of 5.5%/year compounded monthly, payable over a 30-year period in 360 equal monthly installments. Option B: A fixed-rate mortgage at an interest rate of 5.25%/year compounded monthly, payable over a 15-year period in 180 equal monthly installments. (a) Find the monthly payment required to amortize each of these loans over the life of the loan. option A option B (b) How much interest would the Martinezes save if they chose the 15-year mortgage instead of the 30-year mortgage? Need Help? Read It Watch It

58. (-/3 Points] DETAILS TANFIN12 5.3.057. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER The Ability-to-Repay Rule, adopted by the Consumer Financial Protection Bureau in compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires lenders to determine whether a consumer applying for a Qualified Mortgage can afford to repay the loan. One of the requirements is that the borrower's total monthly debt (including property taxes) cannot exceed 43% of the borrower's monthly pre-tax income. Suppose that the Foleys have applied for a $300,000 Qualified Mortgage with an interest rate of 4%/year compounded monthly and a term of 30 years. The property tax on the home they wish to purchase is $6000/year. If the Foleys' annual income is $72,000, will they qualify for the mortgage? (Round your answers to two decimal places.) The Foley's monthly payment would be $ Their monthly income is $ Thus, provided they do not have other significant debts, the Foley's qualify for the mortgage. Need Help? Read It Watch It Viewing Saved Work Revert to Last Response