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A couple is currently leasing a townhouse with a monthly rent of $1,900 per month....

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Finance

A couple is currently leasing a townhouse with a monthly rent of $1,900 per month. They have decided that they want to stay in the city where they are currently living and wish to purchase a home so that their monthly housing costs go toward something that they own.

They have identified a home that they want to purchase.

The home is listed for $285,000

Houses in the neighborhood have been selling for 93% of list price

Property taxes are estimated to be 2.2% of the value of the home

Insurance is estimated to be 0.90% of the value of the home

Homeowners Association dues are $60 per month

In the event the lender requires private mortgage insurance, the annual premium is 1.20% of the original loan amount.

Their combined gross annual income is $126,500. They also owe money on two loans:

A vehicle loan with a monthly payment of $725

A student loan with a monthly payment of $425

They want to determine if they can afford this home and how much of a down payment they need to put into the purchase of the property.

How much cash will they need if they put 15% down toward the purchase price of the property?

How much cash will they need if they put 20% down towards the purchase price of the property?

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