Math 1030

Name _Laura Gonzalez

Buying a House

The listed selling price is $225,000.

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

The down payment is $45,000 .The amount of the mortgage (loan) is $180,000.

Name of first lending institution: America First Credit Union

Rate for 15-year mortgage: 4.1023% Rate for 30-year mortgage 4.5591%.
 Name of second lending institution: Chase Bank.

Rate for 15-year mortgage: 4.061%. Rate for 30-year mortgage 4.597%.

15-year monthly payment: $1,336.95 30-year monthly payment $918.38

15-year mortgage

Payment PaymentPayment Interest Principal Remaining

Number Date Amount ($) Balance ($)
Paid ($) Paid ($)

1. 8/1/2018$1336.95 $609.15 $727.80 $179,272.20

2. 9/1/2018$1336.95 $606.69 $730.26 $178,541.94

50. 9/1/2022$1336.95 $478.12 $858.83 $140,422.90

90. 1/1/2026$1336.95 $353.85 $983.09 $103,578.28

120. 7/1/2028$1336.95 $248.99 $1,087.96 $72,486.59

150. 1/1/2031$1336.95 $132.94 $1,204.01 $38,078.42

180. 7/1/2033$1332.44 $4.51 $1,327.93 $0.00. .

total (over - - - - - - - $240,650.51 $60,650.51 $180,000 ---------

the entire
loan)

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 (180) times The Payment Amount
The total interest paid is the total amount paid minus The Principal Paid.
 Use the proper number to fill in the blanks and cross out the improper word in the
parentheses.
Payment number: 0 (because with this type of loan since the first payment its been
greater by $118.65 than the interest) is the first one in which the principal paid is
greater than the interest paid.

The total amount of interest is $119,349.49 (more or less) than the mortgage.

The total amount of interest is 66.30% (more or less) than the mortgage.

The total amount of interest is 33% of the mortgage.

30-year mortgage

Payment Payment Payment Interest Principal Remaining Balance

Number Date Amount ($) Paid ($) Paid ($) ($)
1. 8/1/2018
. $918.37 $683.87 $234.50 $179,765.50
2. 9/1/2018
. $918.37 $682.97 $235.39 $179,530.11
60. 7/1/2023
. $918.37 $625.07 $293.30 $164,230.67
120. 7/1/2028
. $918.37 $550.13 $368.23 $144,432.49
240. 7/1/2038
. $918.37 $337.94 $580.42 $88,369.33
300. 7/1/2043
. $918.37 $189.65 $728.71 $49,189.61
360. 7/1/2048
. $914.89 $3.48 $911.41 $0.00. .
total (over the - - - - - - - $330,611.51 $150,611.51 $180,000 ---------
entire loan)

Payment number 179 is the first one in which the principal paid is greater than the interest
paid.
The total amount of interest is $29,388.49 (more or less) than the mortgage.

The total amount of interest is 16.33% (more or less) than the mortgage.
 The total amount of interest is 83.67% 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
$118,984.46

The total amount of interest paid with the $100 monthly extra payment would be
$31,627.05 less than the interest paid for the scheduled payments only.

The total amount of interest paid with the $100 monthly extra payment would be 24.68%
(more or less) than the interest paid for the scheduled payments only.

The $100 monthly extra payment would pay off the mortgage in 24 years and 5 months;
that’s 66 months sooner than paying only the scheduled payments.

Written Responses:

1. How does the monthly payment for the 15-year mortgage compare with the monthly payment
for the 30-year mortgage (provide the absolute and relative difference)?

The 15-year loan would be $1336.95. With the 30-year loan it would be $918.37 saving you each month
a good $418.58. You have to know that amount doesn’t included taxes or other utility. If you can't put
that extra $418.58 towards the house you can use it towards the bills.

2. Compare the total amount of interest paid for both the 15-year mortgage and the 30-year
mortgage (provide the absolute and relative difference).

The 15 year compared to the 30 year will save you a total of $89,962.69 in interest. That is a
significant amount of money you would save, but if you can’t afford the $1336.95 monthly
payment over 15 year, you should consider the 30 year plan and also consider to add an extra
$100 dollars to the monthly payments
 3. Compare the monthly payments and the total paid for the 15-year mortgage (no extra payment)
and the 30-year mortgage with the $100 extra payment (provide the absolute and relative
difference).

The 30-year plan with the extra $100 payments. If you just pay 100 extra on top of 918.37
making it every month to be a total of 1018.37 you could still save a significant amount of
money of $299,400.78 in interest and would actually pay it off much quicker. in just 24 years
instead of 30 years.

4. Summarize what you have learned. Keep in mind that the numbers don’t explain everything.
Comment on other factors that must be considered with the numbers when choosing a
mortgage.

If all that it matters were these numbers. The obvious choice would be to go with the 15-year
loan because it saves you so much in interest. But since in the real world you have to pay other
things such as taxes, utilities, government bills, and other responsibilities that comes with life.
The monthly payment of 1336.96 could be a bit high for people to commit each month. What I
would do is choose the 30-year plan and start paying extra payments every month to cut down
on the years.
In conclusion, it all comes down to how much can you pay in your budget. some days you can
add more than others but I strongly believe that the more you pay and the faster you the loan can
disapear, and the more money you can save for the future outcome.

I don't know why the 15-year loan cuts off but I have copied it again here for you to see.

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. 8/1/2018 $1336.95 $609.15 $727.80 $179,272.20
2. 9/1/2018 $1336.95 $606.69 $730.26 $178,541.94
50. 9/1/2022 $1336.95 $478.12 $858.83 $140,422.90
90. 1/1/2026 $1336.95 $353.85 $983.09 $103,578.28
120. 7/1/2028 $1336.95 $248.99 $1,087.96 $72,486.59
150. 1/1/2031 $1336.95 $132.94 $1,204.01 $38,078.42
180. 7/1/2033 $1332.44 $4.51 $1,327.93 $0.00. .
total ------- $240,650.51 $60,650.51 $180,000 ---------
(over the
entire
loan)