6.3: Mortgage Application Process

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What is the assessed value of a home?

Back

The assessed value of a home is the value assigned to it by a public tax assessor for the purpose of determining property taxes.

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How do you calculate property tax?

Back

Property tax is calculated by multiplying the assessed value of the property by the property tax rate (expressed as a percentage).

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CCSS.7.RP.A.3

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If a home has an assessed value of $82,999 and the property tax rate is 5.3%, what is the property tax?

Back

$4,398.95

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CCSS.6.RP.A.3C

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What is APR in the context of a mortgage?

Back

APR (Annual Percentage Rate) is the annual rate charged for borrowing or earned through an investment, which includes any fees or additional costs associated with the loan.

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CCSS.3.NF.A.3C

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How do you calculate the total interest paid on a mortgage?

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Total interest paid can be calculated by subtracting the principal amount borrowed from the total amount paid over the life of the loan.

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CCSS.7.RP.A.3

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What is a down payment?

Back

A down payment is an upfront payment made when purchasing a home, typically expressed as a percentage of the purchase price.

Front

If you borrow $187,000 at an APR of 3.4% over 10 years, what is the total interest paid?

Back

$33,850.40

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CCSS.HSF.BF.A.2

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What is the formula for calculating monthly mortgage payments?

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Monthly mortgage payment = [P * r(1 + r)^n] / [(1 + r)^n - 1], where P = principal, r = monthly interest rate, n = number of payments.

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CCSS.8.EE.C.7B

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What is homeowner's insurance?

Back

Homeowner's insurance is a type of property insurance that covers losses and damages to an individual's home and assets in the home.

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How do you calculate the total monthly payment for a mortgage including taxes and insurance?

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Total monthly payment = Monthly mortgage payment + (Annual property tax / 12) + (Quarterly homeowner's insurance / 3).

Tags

CCSS.7.RP.A.3