Question

Your parents are buying a house for $180,000. They have a good credit rating, are
making a 20% down payment, and expect to pay $1,500/month. The interest rate for the motrgage is
4%. What must their realized income be before each month and how much interest is accrued at the
end of the second month?

Answer 1

will finance 4/5 of the cost: 144000
First month interest: .04(144000)/12=480
1500-480=1020=principal paid first month
New principal: 144000-1020=142980
Second month interest: .04(142980)/12=476.60
First two months accrued interest: 480+476.60=956.60

I guess their realized income must be enough to make the payment. There may be rules for this that I don't know about. But at a minimum it has to be $1500 plus living expenses.

Answer 2

thank you