Math 1030

Name: Giulia Silva

Buying a House

Select a house from a real estate booklet, newspaper, or website. Find something reasonable –
betwee29n $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: 299,950

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

The down payment is: 59,990 The amount of the mortgage is: 239,960

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: 4.125%

Name of second lending institution: Bank of America

Rate for 15-year mortgage: 3.250% Rate for 30-year mortgage: 4.000%

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: $1686.12 30-year monthly payment: $1145.61

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.
It’s 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. . 6/11/17 1686.12 649.89 1036.23 238923.77
2. . 7/11/17 1686.12 647.09 1039.04 237884.73
50. . 7/11/21 1686.12 503.05 1183.08 184556.63
90. . 10/11/24 1686.12 371.43 1314.69 135829.37
120. . 3/11/27 1686.12 264.16 1421.96 96114.55
150. . 8/11/29 1686.12 148.14 1537.99 53159.25
180. . 5/11/32 1686.12 4.55 1667.02 0.00 .
Total ------- 303502.32 63542.32 ---------
135
Use the proper word or phrase to fill in the blanks.
The total principal paid is the same as the amount of the loan
The total amount paid is the number of payments times the 12 months in a year times
the 15 years
The total interest paid is the total amount paid minus the total principal paid
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 $176417.68 less (more or less) than the mortgage.

The total amount of interest is 73.52 less % (more or less) than the mortgage.

The total amount of interest is 26.48% of the mortgage.

30-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 6/11/17 1145.61 799.87 345.74 239614.26
2. . 7/11/17 1145.61 798.71 346.89 239267.37
60. . 5/11/22 1145.61 724.86 420.74 217037.85
120. . 5/11/27 1145.61 631.88 513.73 189049.99
240. . 5/11/37 1145.61 379.73 768.43 113151.68
300. . 5/11/42 1145.61 210.47 935.14 62205.33
360. . 5/11/47 1145.61 3.81 1137.99 $0.00. .
total ------- 412418.07 172458.07 239,960 ---------

Payment number 153 is the first one in which the principal paid is greater than the interest paid.
The total amount of interest is $67,501.93 less (more or less) than the mortgage.

The total amount of interest is 28.13% less (more or less) than the mortgage.

The total amount of interest is 71.87% 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
$144,691.57

The total amount of interest paid with the $100 monthly extra payment would be $27766.5
(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 16% less
(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 9 months;
that’s 51 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 haven’t 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 30-
year 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 don’t
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.

For this project, I found a house that cost 299,950 with a down payment of 59,990
which made the mortgage $239,960. The cheapest rate I found was from Bank of America
with a rate of 3.325% for a 15-year mortgage and 4.00% for a 30-year mortgage. The 15-
year mortgage payment total was $303502.32 which was $108915.75 less than the 30-year
mortgage payment total which was $412418.07. The 30-year mortgage interest total was
$172458.07 which is $109915.75 more than the 15-year mortgage interest total of $63542.32.
So I would say that the best option would be to take a 15-year mortgage instead of a 30-
year because you would pay less interest but it all depends on how much money you can
pay per month, because the monthly payments are obviously larger for a 15-year mortgage
than a 30-year mortgage. There is also the fact that this is one bank so you would have to
look at other banks and maybe find a smaller rate.

https://www.realestate.com/7702-s-founders-point-w-ln-unit-108-midvale-ut-84047--
2093505388