Name: Carston Morrell

Hannah Martin
Math 1030
Nov 7, 2017
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 screenshot 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 $320000

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

The down payment is $64000 The amount of the mortgage is: $256000

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: Wasatch Home Loans

Rate for 15-year mortgage: 3% Rate for 30-year mortgage: 3.75%

Name of second lending institution: Wells Fargo

Rate for 15-year mortgage: 2.875% Rate for 30-year mortgage: 3.5%

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: $1752.54 30-year monthly payment: $1149.55

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 are many programs online available for this including Brett Whissles website:
http://bretwhissel.net/cgi-bin/amortize. A Microsoft Excel worksheet that does is also available
online at
http://office.microsoft.com/en-us/templates/loan-amortization-schedule-TC001019777.aspx?Cat
egoryID=CT062100751033.

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 11/9/17 $1752.54 613.33 1139.21 254860.79

2 12/9/17 $1749.80 607.87 1141.94 253718.86

50 11/9/21 $1749.47 468.54 1280.93 195564.36

90 05/9/24 $1749.16 339.56 1406.23 141730.46

120 11/9/29 $1748.91 234.40 1514.51 97835.10

150 05/9/31 $1748.64 121.40 1627.24 50672.67

180 11/9/32 $1748.35 0.00 1748.35 $0.00

Total ------- 314846.50 58846.50 256000 --------

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

The total principal paid is the same as the: mortgage amount

The total amount paid is the number of payments times: payment amount
The total interest paid is the total amount paid minus: principle
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 $197153.50 (less) than the mortgage.

The total amount of interest is 77.041% (less) than the mortgage.

The total amount of interest is 23% of the mortgage.

30-year mortgage

Payment # Payment Payment Interest Paid Principal Remaining

Date Amount Paid Balance

1. 11/09/17 $1149.55 746.67 402.89 255597.11

2. 12/09/17 $1148.38 744.31 404.06 255193.05

60. 11/09/21 $1148.16 669.74 478.42 229624.51

120. 05/09/24 $1147.89 578.12 569.77 198212.80

240. 11/09/37 $1147.20 339.06 808.13 116250.63

300. 11/09/42 $1146.75 184.31 962..44 63190.99

360. 11/09/47 $1146.21 0.00 1146.21 0.00

Total ----- 413094.09 157094.09 256000 -----

Payment number 123 is the first one in which the principal paid is greater than the interest paid.

The total number of interest is $98905.91 (less) than the mortgage.

The total amount of interest is 38.64% (less) than the mortgage.

The total amount of interest is 61.36% 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
$133907.09.

The total amount of interest paid with the $100 monthly extra payment would be $23187
(less) than the interest paid for the scheduled payments only.

The total amount of interest paid with the $100 monthly extra payment would be
14.76% (less) than the interest paid for the scheduled payments only.

The $100 monthly extra payment would pay off the mortgage in 26 years and 1 months;
thats 47 months sooner than paying only the scheduled payments.

Overall, the 15 year mortgage is better than the 30 year mortgage. Yes, you have higher monthly
payments, however you have $98247.59 in interest that you would have to pay, saving you
nearly $100000 on your loan. Another bonus to the 15 year mortgage is owning your home 15
years sooner to the 30 year loan.
Home is located in Salt Lake City, Utah 84106