You are ready to buy a building and you have $20,000 for a down payment...
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You are ready to buy a building and you have $20,000 for a down payment and closing costs. Closing costs are estimated to be 4% of the loan value. You have an annual income of $36,000 and the bank is willing to allow your monthly mortgage payment to be equal to 28% of your monthly income. The interest rate on the loan is 6% per year with monthly compounding (.5% per month) for a 30-year fixed rate loan.
How much money will the bank loan you and how much can you offer for the building? First, calculate the loan you are qualified for.
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