Math 1030

Name __Debbie Penate ______

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 _$240,000______.

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

The down payment is __$48,000______. The amount of the mortgage is __$192,000___.

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: __3.2249%___. Rate for 30-year mortgage _3.932%___.

Name of second lending institution: __Cyprus Credit Union _______.

Rate for 15-year mortgage: __3.335%____. Rate for 30-year mortgage __3.869%___.

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: __$1,346.78___. 30-year monthly payment _$ 902.20___.

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 Paid Principal Remaining

Number Date Amount ($) ($) Paid ($) Balance ($)
1. . 11/21/17 $1346.78 $515.98 $830.80 $191,169.20
2. . 12/21/17 $1346.78 $513.75 $833.03 $190,336.17
50. . 12/21/21 $1346.78 $399.22 $947.51 $147,603.58
90. . 4/21/25 $1346.78 $291.83 $1054.95 $107,538.03
120. . 10/21/27 $1346.78 $203.38 $1143.40 $74,536.36
150. . 4/21/30 $1346.78 $107.52 $1239.27 $38,767.68
180. . 10/21/32 $1346.78 $3.61 $1339.56 $0.00. .
total ------- $242,420.40 $50,420.95 $242,420.95 ---------

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

The total principal paid is the same as the ___$192,000.00__Mortgage_________.
The total amount paid is the number of payments times _$1346.78___Monthly
Payment_____.
The total interest paid is the total amount paid minus __$192,000.00 Mortgage__/
$242,420.90 Principal______.

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 $_141,579.05______ (more or less) than the mortgage.

The total amount of interest is __73.7_____% (more or less) than the mortgage.

The total amount of interest is __26.2______% of the mortgage.

30-year mortgage

Payment Payment Payment Interest Paid Principal Remaining

Number Date Amount ($) ($) Paid ($) Balance ($)
1. . 11/21/17 $902.20 $619.04 $283.16 $191,716.84
2. . 12/21/17 $902.20 $618.13 $284.07 $191,432.77
60. . 10/21/22 $902.20 $559.82 $342.38 $173,289.18
120. . 10/21/27 $902.20 $486.87 $415.32 $150,592.00
240. . 10/21/37 $902.20 $291.05 $611.15 $89,660.41
300. . 10/21/42 $902.20 $160.85 $741.35 $49,146.03
360. . 10/21/47 $902.20 $2.90 $896.40 $0.00. .
total ------- $324,790.69 $132,790.70 $324,790.69 ---------

Payment number _146__ is the first one in which the principal paid is greater than the interest paid.
The total amount of interest is $_132,790.70______ (more or less) than the mortgage.

The total amount of interest is _30.8___% (more or less) than the mortgage.

The total amount of interest is __69.2_____% 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
$_107,355.36_____.

The total amount of interest paid with the $100 monthly extra payment would be
$__132,790.70_ (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
__30.8___% (more or less) than the interest paid for the scheduled payments only.

The $100 monthly extra payment would pay off the mortgage in _25___ years and _0_
months; thats __60__ 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
30year 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.

Ive learned that it would take a really long time to completely pay off
your mortgage. I learned a lot about calculating payments, plug it in
formula; also known as amortization schedule. Looking at different rates
and comparing which one is my best possible choice. How the principal and
interest trade off during a short or long period of time. For my house
project, I found that the difference between a 15 yr payment vs a 30yr
payment is only about $ 444.58 monthly. When comparing interests from
the 15yr and 30yr loan I would get a result of $82,369.75. Adding on extra
payments like the $100 dollars each month lowered my interest and ended
up being $56,934.41 difference from my 15yr vs 30yr comparison.
Some factors that should be crucially considered is the amount a
family or individual can afford to pay each month based on income. Look
at the rise of interest rates, a persons job security, length of time staying in
that home, a 20% or high down payment, and just being financially advised
with alternatives.