Math 1030 Project 1

Name ___Ashlyn Talcott________

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 __$315,000__________.

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

The down payment is __$63,000__________. The amount of the mortgage is

__$252,000__________.

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: ____Wells Fargo_______________________.

Rate for 15-year mortgage: __3.375%__________. Rate for 30-year mortgage

___4.00%_________.

Name of second lending institution: _____Mountain America_________________.

Rate for 15-year mortgage: __3.25%_____. 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: ___$1,771_. 30-year monthly payment _$1,185__.

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.

15-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
 1. . 12/1/17 $1,770.73 $682.50 $1,088.23 $250,911.77
2. . 1/1/18 $1,770.73 $679.55 $1,091.18 $249,820,59
50. . 1/1/22 $1,770.73 $528.28 $1,242.45 $193,816.50
90. . 5/1/25 $1,770.73 $386.33 $1,384.40 $141,259.73
120. . 11/1/27 $1,770.73 $269.31 $1,501.42 $97,937.67
150. . 5/1/30 $1,770.73 $142.41 $1,628.32 $50,953,86
180. . 11/1/32 $1,770.73 $4.78 $1,764.84 $0.00. .
total ------- $318,730.29 $66,730.29 $252,000.00 ---------

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

The total principal paid is the same as the __mortgage________.

The total amount paid is the number of payments times ___180________.
The total interest paid is the total amount paid minus ___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 $66,730.29____More__ (more or less) than the mortgage.

The total amount of interest is ____73.5 ____% LESS than the mortgage.

The total amount of interest is ______26.5_______% of the mortgage.

30-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 12/1/17 $1,096.72 $682.50 $414.22 $251,585.78
2. . 1/1/18 $1,096.72 $681.38 $415.34 $251,170.44
60. . 11/1/22 $1,096.72 $610.83 $485.89 $225,052.98
120. . 11/1/27 $1,096.72 $525.23 $571.49 $193,358.23
 240. . 11/1/37 $1,096.72 $306.10 $790.62 $112,231.91
300. . 11/1/42 $1,096.72 $166.80 $929.92 $60,659.19
360. . 11/1/47 $1,096.72 $2.96 $1,093.63 $0.00. .
total ------- $394,819.07 $142,819.07 $252,000 ---------

Payment number __105___ is the first one in which the principal paid is greater than the interest
paid.

The total amount of interest is $__142,819.07 more___ (more or less) than the mortgage.

The total amount of interest is ___43.3___Less___% (more or less) than the mortgage.

The total amount of interest is ___56.7__________% 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
$__117,981.96______.

The total amount of interest paid with the $100 monthly extra payment would be
$24,837.11 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 17% 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 _0___
months; that’s __48__ months sooner than paying only the scheduled payments.