Bryan Southwick

Math1030
Home Buying Project

1. What is the career you are interested in pursuing after completing your education? (If you are
already in a career, feel free to use that.)
I am studying to become an Architect. I really love the design process and working with people.

2.

What is the expected starting salary for your career? Look at several different sites on the
Internet and include the name of these sites along with the URL. (If you would rather not
list your current income, feel free to use an average for the career)

More or less $75000 starting Salary

http://money.usnews.com/careers/best-jobs/architect/salary
http://www1.salary.com/Architecture-Salaries.html
http://www.payscale.com/research/US/Job=Design_Architect/Salary

3.

What is the maximum house price you will be able to afford? You can get help with this
by searching on the Internet for How much house can I afford? Provide an explanation
on how you arrived at your house price.

According to Zillows affordability calculator with my different monthly commitments and

investments i can afford a house of a max of about $300000.

4.

Where is the location in which you would like to purchase a home?

Salt Lake City Area

5.

Find a listing statement for a house that has been listed within the last 6 months and
meets your criteria for price and location. The listing should include the date when the
property was listed, cost of property, and a picture. Cut and paste a description of the
home into the document. No urls here, I would like to see the home.

Description
Looking for a home that you can move in to day one and literally do nothing to make it feel like
home? This is it! There has been so much love and time put in to this home, both inside and out,
to make it a beautiful place to live. From the reclaimed wood wall in the master bedroom, to the
custom pergola and beautiful landscape in the backyard, this is a place you can certainly call
HOME. Quiet street, close to freeway access, parks and shopping. Garage was completely rebuilt
5 years ago. All siding on home was replaced 5 years ago. Entire home has been updated!
3251 S Lester St W

Salt Lake City, UT 84119

$299,900 STATUS: ACTIVE UNDER CONTRACT ON SITE: 15 DAYS ID#:

1388713

Assuming that you will be making a down payment of 20% and have good financial standing,
use the internet to obtain interest rates for a 30 year loan and for a 15 year loan from two
different lenders. Include each of these interest rates, along with where they were obtained, in
your written report. Use the worksheet here as a guide.
The listed selling price is 300000. Assume that you will make a down payment of 20%. The
down payment is 60000 The amount of the mortgage is 240000.
Ask at least two lending institutions for the interest rate for both a 15year and a 30year fixed rate
mortgage with no points or other variations on the interest rate for the loan.
Name of first lending institution: Wells Fargo Bank
Rate for 15year mortgage: 3.56 Rate for 30year mortgage 4.1.
Name of second lending institution: American Lending Group.
Rate for 15year mortgage: 3.45. Rate for 30year mortgage 3.67.
Assuming that the rates are the only difference between the different lending institutions, find the
monthly payment at the better interest rate for each type of mortgage.
15year monthly payment: 1709.83. 30year monthly payment 1100.61.

Payment number OCTOBER 2027 is the first one in which the principal paid is greater than the
interest paid. The total amount of interest is $3.33 (more) than the mortgage.
The total amount of interest is 35% LESS than the mortgage.
The total amount of interest is 39% of the mortgage.

Payment number 1 is the first one in which the principal paid is greater than the interest paid.
The total amount of interest is $158642.40 than the mortgage.
The total amount of interest is 66% less than the mortgage. The total amount of interest is 33%
of the mortgage.

PA R T 3 O b s e r v a t i o n s a n d R e f l e c t i o n s :
Doing this project i have learned a lot of things about mortgages. I would number one for sure
take the 15 year mortgage if i could afford the higher payment. The payment is 1785.32 Rather
than 1100.61 so it is quite a bit higher but the interest paid over the term of the loan is almost
Halve the cost. There is never a payment that i would make that i paid more interest to principal.
Even making extra payments on the 30 year mortgage doesn't make sense to me because if i
decided to sell the home before the term is over i will have made more equity based payments to
the principal in tern earning me more money. The total interest of the 15 year interest is 81357.60
so it is about 30% of the value of the loan over the term. The 30 year loan is 155759.30 this is
nearly 66% of the loan value or double the 15 year total. This is the reason i would buy a smaller
house to start and do a 15 year to build equity faster once im in a dream home that i plan on
retiring in i would really think of the 30 year to bring the payments down. If i could make
enough extra payments on a 30 year loan to pay it off in 15 years i think i would consider trying
to do that but there is no guarantee and the difference is still a higher interest paid at the
beginning than the principal. At the end of the day i would for sure not be renting because you
aren't earning anything, you never pay yourself back. Every penny spent is sent to someone else
and they benefit from it. There is no positive turnaround for a renter after 5-10-15- or 30 years.