need to calculate total purchase price I can afford for a home.
monthly income $5875.
.28 x $5875.=$1645.monthly mortgage
7.70 interest for 25years.placing 25% of my yearly income down.
this is as far as I have gotten...
7.70x = 1645.
7.70x 1645
7.70 7.70
To calculate the total purchase price you can afford for a home, you need to take into account your monthly mortgage payment, the interest rate, the loan term, and the down payment amount.
First, let's calculate the maximum monthly mortgage payment you can afford. You have already determined this by multiplying your monthly income by 0.28.
Monthly mortgage payment = monthly income x 0.28
Monthly mortgage payment = $5875 x 0.28
Monthly mortgage payment = $1645
Next, let's calculate the total mortgage amount you can afford by considering the interest rate and the loan term. From your question, it seems that the interest rate is 7.70% and the loan term is 25 years.
To calculate the total mortgage amount, you can use the formula for calculating the monthly payment on a mortgage:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Where:
M = Monthly mortgage payment
P = Principal amount (total mortgage amount)
i = Monthly interest rate (annual interest rate divided by 12)
n = Total number of monthly payments (loan term in years multiplied by 12)
In this case, you want to solve for the principal amount (total mortgage amount).
Let's convert the annual interest rate to a monthly interest rate:
Monthly interest rate = 7.70% / 100 / 12
Monthly interest rate = 0.0770 / 12
Monthly interest rate = 0.00642
Now, let's calculate the total mortgage amount:
$1645 = P [ (0.00642)(1 + 0.00642)^(25*12) ] / [ (1 + 0.00642)^(25*12) – 1 ]
To solve this equation, you can use a mortgage calculator or a spreadsheet program like Microsoft Excel. Simply plug in the values and solve for P (the principal amount).
Once you have calculated the total mortgage amount, you can determine the total purchase price you can afford by adding the down payment amount. From your question, it states that you are putting 25% of your yearly income down. Let's assume the yearly income is $5875 x 12 = $70,500. Therefore, the down payment would be 25% of $70,500.
Down payment = 25% x $70,500
Down payment = $17,625
Total purchase price = Total mortgage amount + Down payment
By calculating these values, you will have a better understanding of the total purchase price you can afford for a home based on your income, monthly mortgage payment, and down payment.