Brooke Mathis

Math 1030
Heather Toponce

Finance Project

The Listing
Source: KSL
List Price: $299,999
Down Pmt: $59,999.80
Mortgage Amt: $239,999.20

Payments at the Better Interest Rate

15-year monthly payment: $1,670.70 30-year monthly payment $1,113.38
15-Year Loans
Lender: Sebonic
Rate for 15-yr Mortgage: 3.115%
15-year Mortgage Loan Payment: $1,670.70

Lender: HSBC
Rate for 15-yr Mortgage: 3.451%
15-year Mortgage Loan Payment: $1709.94

Use the proper word or phrase to fill in the blanks. (Im using the better rate with better monthly
payment for this section.)
The total principal paid is the same as the loan amount.
The total amount paid is the number of payments times your monthly payment.
 The total interest paid is the total amount paid minus your loan amount.

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

The total amount of interest is $60,726.21 (more or less) than the mortgage.

The total amount of interest is 75% (more or less) than the mortgage.

The total amount of interest is 25% of the mortgage.

30-Year Loans
Lender: Sebonic
Rate for 30-yr Mortgage: 3.764%
30-year Mortgage Loan Payment: $1113.38

Lender: HSBC
Rate for 30-yr Mortgage: 4.09%
30-year Mortgage Loan Payment: $1,158.28
Payment number 157 is the first one in which the principal paid is greater than the interest paid.
The total amount of interest is $79,181.18 (more or less) than the mortgage.

The total amount of interest is 33% (more or less) than the mortgage.

The total amount of interest is 67% 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 $0.00. No
interest is paid when making an additional monthly payment. The full $100 goes toward
principal.
The total amount of interest paid with the $100 monthly extra payment would be $25,510.69
(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 15.8%
(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 10 months;
thats 50 months sooner than paying only the scheduled payments.
Summary:

In this project, we compared 15-year mortgage loans vs 30-year mortgage loans, different interest rates
and the impact those as well as extra payments can make on not only the overall interest paid on a loan,
but the length of a loan as well.

Prior to this class, I had it in my mind that on a mortgage loan, those who had a 15-year loan were
paying 2x the monthly mortgage payment than if they had a 30-year mortgage. This is not the case.
Although, it is a higher monthly payment for a 15-year mortgage vs a 30-year, it is not double. For
example; consider a home where the loan amount is $250,000 at 4% interest. The monthly mortgage
payment on a 15-year loan would be $1,849.22 and for a 30-year $1,193.54. That is only a difference of
$655.68.

Im appreciative of this assignment for what I learned about amortization schedules. It taught me the
importance in making educated decisions and being informed. Making extra payments each month,
getting a better interest rate or having a 15 year loan all make a significant impact on the overall
expense of a home. Amortization schedules keep buyers informed as to where their money is going
allowing buyers to be able to make a better option for their situation.

Research your options! Decide whats important, consider your situation and ask yourself; is it worth it
to us to pay more overall for a 30-year loan? Is it worth it to wait until you can afford a 20% down
payment and a 15-year loan?