Eli is buying a townhouse that costs $276,650. He has $28,000 in savings and earns $4,475 a month. Eli would like to spend no more than 30% of his income on his mortgage payment. Which loan option would you recommend to Eli? a. 30 year FHA, 3. 5% down at a fixed rate of 6. 5% b. 30 year fixed, 5% down at a fixed rate of 6. 25% c. 30 year fixed, 6. 5% down at a fixed rate of 5. 75% d. 30 year fixed, 10% down at a fixed rate of 5%.

The quotient of a loan, that is charged as interest to the receiver, is typically expressed as an annual percentage of the loan outstanding.

Given data are:

Cost of buying a townhouse = $276,650

Savings = $28,000

Earns per month = $4,475

computation:

When we take 10% down, fix rate than a cover for the down payment is:

cover for the down payment :

[tex]\text{Cover for the down payment}=\text{10\%}\times\text{Cost of House}\\\\\text{Cover for the down payment}=\dfrac{10}{100} \times\$276,650\\\\\text{Cover for the down payment}=\$27,665.[/tex]

And, here monthly income is $4,475

So, the mortgage will be :

[tex]\text{Mortgage}=30\%\times\$4,475\\\\\text{Mortgage}= \$1,342.50.[/tex]

So, by the balance of the mortgage is:

[tex]\$276,650 - \$27,665= \$248,985.[/tex]

Hence, the total monthly repayment is:

Total monthly repayment:

[tex]\$248,985\times\dfrac{0.05}{12}+\dfrac{348985}{30\times12}\\\\=\$1729.08.[/tex]

Therefore, option D is correct.

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