Essay About 6,666.67Monthly Property Tax And Insurance Premium Savings

Derivatives,securities Commision
QUESTION 1-a-As I have first read to question, I wasn’t clear on whether we were required to calculate the savings for the duplex or for the primary residence. However since only half of the $40,000 is mentioned as down payment, I believe the question is asking us to investigate the insurance premium savings for the primary residence.$350,000 / 2 – $20,000 = $155,000 would be borrowed as mortgage to buy the residence worth $175,000The ratio of the mortgage to home value is more than 85% but less than 90%, therefore the applicable premium rate is 2.40% of $155,000.Premium ($) = 155,000 * 0.0240 = $3,720Transfer of the $50,000 inherited for down payment on the duplex would lower the residence mortgage by $50,000/2 = $25,000155,000 – 25,000 = 130,000130,000/175,000 is barely less than 75%, therefore the applicable premium rate is 0.75% of the $130,000 mortgage.0.75% * 130,000 = $975$3,720 – $975 = $2,745 is saved for the insurance premium on the residence.If the duplex is fully considered; 2,745 * 2 = $5,490 would be saved.Reference: