Balloon Payment Mortgage
| Mortgage amount | $170,000 |
| --- | --- |
| Term | 8 years |
| Interest rate | 4% |
| Monthly payment | $811.61 for 95 months |
| Balloon payment | $143,152.99 |
| Total Interest | $50,256 |
| Total Payment | $220,256 |
According to the chart, the initial monthly payment Demarco and Tanya should anticipate paying on principal and interest is [ ]. They should budget $400 for insurance and tax payments, so the total amount they should anticipate paying monthly is [ ].
Answer (2)
The initial monthly payment for principal and interest is $811.61 .
They budget $400 for insurance and tax payments.
The total monthly payment is the sum of the principal and interest payment and the insurance and tax payments: $811.61 + $400 = $1211.61 .
The total amount they should anticipate paying monthly is $1211.61 .
Explanation
Understanding the Problem We are given a table that describes a balloon payment mortgage. The table provides the mortgage amount, term, interest rate, monthly payment, balloon payment, total interest, and total payment. We need to find the initial monthly payment for principal and interest and the total monthly payment including insurance and taxes.
Finding Initial Monthly Payment The initial monthly payment for principal and interest is directly provided in the table. According to the chart, the initial monthly payment Demarco and Tanya should anticipate paying on principal and interest is $811.61 .
Calculating Total Monthly Payment They should budget $400 for insurance and tax payments. To find the total amount they should anticipate paying monthly, we need to add the monthly payment for principal and interest to the budget for insurance and tax payments. So, we calculate $811.61 + $400 = $1211.61 .
Final Answer Therefore, the initial monthly payment for principal and interest is $811.61 , and the total amount they should anticipate paying monthly, including insurance and taxes, is $1211.61 .
Examples
Understanding mortgage payments is crucial in real estate. For instance, when buying a home, knowing the principal and interest payment helps in budgeting and financial planning. Adding insurance and tax estimates provides a more accurate picture of the total monthly housing cost. This knowledge aids in making informed decisions about affordability and long-term financial stability.
Demarco and Tanya's initial monthly payment for principal and interest is $811.61. When budgeting for $400 in insurance and taxes, their total anticipated monthly payment is $1211.61.
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