Essays on Home Loan

1. Personal Annual Income

The personal annual income is $19,200.

2. Monthly Payment a) The monthly amount is found by dividing the annual income by 12: $19,200 / 12 = $1,600. b) The monthly payment is maximum 33% of the monthly income, which is: $1,600 ∙ 33% = $1,600 ∙ 0.33 = $528.00. c) Maximum required payment (monthly payment minus fees): $528.00 / 1.15 = $459.13.

This is the maximum amount that a person can afford to pay each month for a home loan.

3. Loan Amount Using the Excel table, the maximum amount for home loan was found for monthly payment $459.13 at 4.18% APR for 30 years. This amount is $94,113.00. Thus, a person can afford a house for about $94, ...

The Savings and Loan Crisis, or commonly known as S&L, is termed as one of the largest financial crisis in the United States history. The crisis began in the late 1970s, and its impacts on the economy were felt in the 1980s and ended in the early 1990s. Various sources have indicated the causes of the S&L crises. Some of the documented reasons include high and volatile interest rates during the period, the phase-out and its elimination, negative regional economic conditions, and federal and state deregulation of depository institutions. Other reasons include deregulation of the thrift industry, declining regulatory ...

Global Financial Crisis in the US

Introduction It was hard for the economists, professional analysts and policymakers among other players in the financial industry to foresee the crisis in the US mortgage lending industry in 2007 that resulted in the world's worst economic recession in two years' time (Sher and Iyanatul 2010). Initially, there was a housing bubble characterized by high house prices, low-interest rates, more support for subprime mortgage and increased speculation by the buyers (Acharya and Schnabl 2010). Eventually, there were decline of house market prices, increased lending rates and increased default and foreclosures by the mortgagors (John 2009). Notably, by mid-2008 the ...

The policy issue being addressed is the incentive for home loan borrowers and the objective for this policy is to help the home loan borrowers to overcome the difficult financial conditions (Agencies). This policy of allowing the home borrowers an additional deduction of Rs 1 lakh also aims at providing employment to many people in the construction industry (Agencies). The home loan includes the loan borrowed for the construction, repair, purchase or reconstruction of a house (Agencies). The interest that is to be paid on the money borrowed on loans is reduced.

The incentive will encourage investment in the ...

As explained, switching costs are those costs that are levied by the banking industry, or other financial institutions to loan borrowers who wish to transfer these loans to other institutions. The philosophy behind these costs is to make it expensive for borrowers to make this switch, so as to ensure that customers remain with their initial loan providers. In the Australian loans market, there existed a number of switching costs that, as the government noted were actually not related to the actual processing costs of the switching process and that is why it was decided that these costs need ...

One of the major causes of the Great Depression had to do with excessive speculation in financial markets, and one of the major tragedies that resulted was a foreclosure epidemic that created the torrent of “Okies,” farmers from Oklahoma (and other parts of the Great Plains) who had been kicked off their land and just headed west, because of the rumors of work in the California fruit fields. Of course, there were many fewer jobs than what was initially advertised (excess supply of labor means rock-bottom wages), and so California was left with a legion of sharecroppers with no other refuge ...