Math 1030

Name :Veronica Echeverria

Buying a House

Select a house from a real estate booklet, newspaper, or website. Find something reasonable
between $100,000 and $350,000. In reality, a trained financial professional can help you
determine what is reasonable for your financial situation. Take a screen shot of the listing for
your chosen house and attach it to this project. Assume that you will pay the asking price for
your house.

The listed selling price is $319,900

Assume that you will make a down payment of 20%.

The down payment is $6,3980 The amount of the mortgage is $255,920

Ask at least two lending institutions for the interest rate for both a 15-year and a 30-year fixed
rate mortgage with no points or other variations on the interest rate for the loan.

Name of first lending institution: America First Credit Union___.

Rate for 15-year mortgage: ____3.25%_. Rate for 30-year mortgage ___3.875%___.

Name of second lending institution: Chase Bank.

Rate for 15-year mortgage: 3.125%. Rate for 30-year mortgage 3.875%.

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.

15-year monthly payment: $1782.76. 30-year monthly payment :$1,203.43

These payments cover only the interest and the principal on the loan. They do not cover the
insurance or taxes.

To organize the information for the amortization of the loan, construct a schedule that keeps
track of: (1) the payment number and/or (2) the month and year (3) the amount of the payment,
(4) the amount of interest paid, (5) the amount of principal paid, and (6) the remaining balance.
There is a Loan Amortization sschedule in CANVAS.

Its not necessary to show all of the payments in the tables below. Only fill in the payments in
the following schedules. Answer the questions after each table.
15-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 1/10/18 $1,782.76 $666.46 $1,116.30 $254,803.70

2. . 2/10/18 $1,782.76 $663.55 $1,119.21 $253,684.48

50. . 2/10/22 $1,782.76 $514.74 $1268.03 $196,390.63

90. . 6/10/25 $1,782.76 $375.72 $1,407.71 $142,867.82
120. . 12/20/27 $1,782.76 $261.54 $1,521.23 $98,908.88
150. . 6/10/30 $1,782.76 $138.09 $1,644.67 $51,382.77
180. . 12/10/32 $$1,782.76 $4.63 1,773.50 $0.00. .
320,897.2736 $64,977.27
total ------- 255,920 ---------

Use the proper word or phrase to fill in the blanks.

The total principal paid is the same as the Loan Value.
The total amount paid is the number of payments times The monthly payments.
The total interest paid is the total amount paid minus the principal paid.

Use the proper number to fill in the blanks and cross out the improper word
in the parentheses.
Payment number 1 is the first one in which the principal paid is greater than the interest
paid.

The total amount of interest is $64,977.27 (more or less) than the mortgage.

The total amount of interest is 74.61% (more or less) than the mortgage.

The total amount of interest is 25.39 of the mortgage.

30-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 1/10/18 $1,203.43 $826.41 $377.02 $255,542.98
2. . 2/10/18 $1,203.43 $825.19 $378.24 $255,164.74
60. . 12/10/22 $1,203.43 $747.42 $456.01 $231,002.78
120. . 12/10/27 $1,203.43 $650.10 $553.33 $200,767.88
240. . 12/10/37 $1,203.43 $388.72 $814.71 $119,563.37
300. . 12/10/42 $1,203.43 $214.85 $988.58 $65,545.74
360. . 12/10/47 $1,203.43 $3.87 $1,195.68 $0.00. .
433235.0682 $177,315.07
total ------- $255919.9982 ---------

Payment number _147____ is the first one in which the principal paid is greater than the interest
paid.
The total amount of interest is $177,315.07 (more or less) than the mortgage.

The total amount of interest is 30.71% (more or less) than the mortgage.

The total amount of interest is ____69.28_________% of the mortgage.

Suppose you paid an additional $100 a month towards the principal

The total amount of interest paid with the $100 monthly extra payment would be $__
$150,473.73_.

The total amount of interest paid with the $100 monthly extra payment would be
$26,877.34 (more or less) than the interest paid for the scheduled payments only.

The total amount of interest paid with the $100 monthly extra payment would be
___20________% (more or less) than the interest paid for the scheduled payments only.

The $100 monthly extra payment would pay off the mortgage in ___26_ years and _0___
months; thats __48____ months sooner than paying only the scheduled payments.
Summarize what you have done and learned on this project. Because this is a math project, you
must compute and compare numbers, both absolute and relative values, that havent been
compared above. Statements such as a lot more and a lot less do not have meaning in a
Quantitative Reasoning class. Make the necessary computations and compare (1) the 15-year
mortgage payment to the 30-year mortgage payment, (2) the 15-year mortgage interest to the 30-
year mortgage interest, (3) the 15-year mortgage to the 30-year mortgage with an extra payment,
and (4) the 15-year mortgage to the 30-year mortgage with a large enough extra payments to
save 15 years and have the loan paid off in 15 years. Also, keep in mind that the numbers dont
explain everything. Comment on other factors that must be considered with the numbers when
making a mortgage.

In this project, we compared 15-year mortgage loans vs 30-year mortgage loans. We compared the different

interest rates and the impact, as well as what an extra payment can make on the interest paid on a

loan and as well as the length of a loan. Before this class my husband and I were house shopping,

my idea on a mortgage loan, was those who had a 15-year loan were paying twice as much on

their monthly mortgage payment rather if they had gone with the 30-year mortgage, well that

was not the case, I had a wake up call. It IS a higher monthly payment for a 15-year mortgage vs a 30-year

but that does not mean that it double. Though what did double was the interest that was paid it went from the total

interest paid for 15 years of $64,977.27 the interested paid in 30 years of a total of $177,315.07.

The longer the loan is the more interest you will pay and the higher the possibilities is

that your interest rate will be higher as will. Overall, this proect has shown me even though your

monthly payments will be higher but you are saving $112,337.80 for a 15 year loan for the loan

value of $255,929 that if you pay a 20% down payment on the home value.

Your submission must be in pdf format. Refer to the assignment rubric to see how you'll be

graded.