Math 1030

Name ____Natasha Wilson_______

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 ___$349,800.00____.

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

The down payment is __$69,960.00__. The amount of the mortgage is

__$279,840.00___.

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: ___Wells Fargo____.

Rate for 15-year mortgage: __3.375%___. Rate for 30-year mortgage __4.0%__.

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: __$1,966.35__. 30-year monthly payment __$1,315.91__.

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 schedule 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. . 12/10/17 $1,966.35 $757.90 $1,208.45 $278,631.55
2. . 1/10/18 $1,966.35 $754.63 $1,211.72 $277,419.83
50. . 1/10/22 $1,966.35 $586.65 $1,379.70 $215,228.90
90. . 5/10/25 $1,966.35 $429.01 $1,537.34 $156,866.11
120. . 11/10/27 $1,966.35 $299.07 $1,667.28 $108,758.19
150. . 5/10/30 $1,966.35 $158.15 $1,808.20 $56,584.05
180. . 11/10/32 $1,966.35 $5.31 $1,955.73 $0.00. .
total ------- $353,942.69 $74,102.69 $279,840.00 ---------

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

The total principal paid is the same as the ____Loan amount for the mortgage_____.
The total amount paid is the number of payments times ___Payment amount____.
The total interest paid is the total amount paid minus ___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 $__$205,737.31 less__ (more or less) than the mortgage.

The total amount of interest is __73% less ___% (more or less) than the mortgage.

The total amount of interest is __37__% of the mortgage.

 30-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 12/10/17 $1,315.91 $903.65 $412.26 $279,427.74
2. . 1/10/18 $1,315.91 $902.32 $413.59 $279,014.15
60. . 11/10/22 $1,315.91 $817.28 $498.63 $252,593.85
120. . 11/10/27 $1,315.91 $710.86 $605.05 $219,533.00
240. . 11/10/37 $1,315.91 $425.05 $890.86 $166,717.31
300. . 11/10/42 $1,315.91 $234.93 $1,080.98 $71,672.09
360. . 11/10/47 $1,315.91 $4.24 $1,307.68 $0.00. .
total ------- $473,728.12 $193,888.12 $279,840.00 ---------

Payment number _On the actual Amortization schedule it is #147, but on the chart it is
payment #240._ is the first one in which the principal paid is greater than the interest paid.
The total amount of interest is $__85,951.88 less__ (more or less) than the mortgage.

The total amount of interest is __31% less___% (more or less) than the mortgage.

The total amount of interest is ___69__% 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
$_166,675.45__.

The total amount of interest paid with the $100 monthly extra payment would be
$_27,212.67 less__ (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 __14%
less__% (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 _4_
months; thats _44_ 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.
Your submission must be in pdf format. Refer to the assignment rubric to see how you'll be
graded.

The 15 year monthly mortgage payment is $1,966.35 and the 30 year monthly
payment is $1,315.91; if choosing the 30 year plan, you would spent $650.44 less
monthly than you would if you chose the 15 year plan. Although, it may seem at
first that its the cheaper solution, in reality, you will still play that money
eventually. The 15 year total interest is $74,102.60 while the 30 year total interest is
$193,888.12.. that is a difference of $119,785.52 within only 15 extra years. If you
paid an extra $100 monthly towards the principal with the 30 year mortgage you
would save $27,212.67 on total interest. Just that $100 extra dollars per month
could really help you cut down your total interest cost. It would also pay off the
mortgage a lot sooner, 44 moths to be exact- which also might make it worth it.
Personally, if I were to pick between a 15-year mortgage and a 30-year mortgage I
would much rather go with the 15-year. Although you may be spending $650.44
more monthly with the 15 year mortgage, you would save $119,785.52 in the long
run-in my opinion, I think its worth it.

LINK TO THE HOUSE:

https://www.zillow.com/homes/for_sale/house_type/12760306_zpid/150000-350000_price/
551-1286_mp/globalrelevanceex_sort/
40.772514,-111.824555,40.730966,-111.894422_rect/13_zm/