Hailey Clement

Mr. Pace
Math 1030
24 October 2018
Finance Project

List price for this home is ​$336,950

If I make a 20% down payment of​ $67,390​, then the mortgage amount would be
$269,560

Lending Institutions:
● WaterMark Home Loans
○ 15-year rate: 4.069%
○ 30-year rate: 4.644%
● Sebonic Financial
○ 15-year rate: 4.060%
○ 30-year rate: 4.744%
Monthly Payments:

−(15)(12)
d(1−(1+ .04060
12 )
● 15-year:​ 269, 560 = .04060 ​So I would have to pay
12

$2,002.02 a month for 15 years.

−(30)(12)
d(1−(1+ .04644
12 )
● 30-year:​ 269, 560 = .04644 ​So I would have to pay
12

$1,388.98 a month for 30 years.

30-year Mortgage:
https://www.amortization-calc.com/mortgage-calculator/?amount=269560&term=30-years&rate=4.644&date=2018-10

Payment Payment Payment Interest Paid Principal Remaining

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

1. Oct. 2018 $1,389 $1,043 $346 $269,214

2. Nov. 2018 $1,389 $1,042 $347 $268,867

60. Oct. 2023 $1,389 $953 $436 $245,821

120. Oct. 2028 $1,389 $839 $550 $216,327

240. Oct. 2038 $1,389 $515 $874 $132,255

300. Oct. 2043 $1,389 $287 $1,102 $73,035

360. Sept. 2048 $1,389 $5 $1,384 $0.00

total ---------------- ---------------- $230,473 $269,560 ----------------

>The total amount paid is the number of payments times ​the monthly payment amount.
>The total interest amount is the total amount paid minus ​the total principal.
>Payment number ​181​ is the first one in which the principal paid is greater than the
interest paid.
● The total amount of interest is ​$39,087​ (​more​ or ​less​) than the mortgage.
● The total amount of interest is ​≈14.5%​ (​more​ or ​less​) than the mortgage.
 ● The total amount of interest is ​≈85.5%​ of the mortgage.

15-year Mortgage:
https://www.amortization-calc.com/mortgage-calculator/?amount=269560&term=15-years&rate=4.06&date=2018-10

Payment Payment Payment Interest Paid Principal Remaining

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

1. Oct. 2018 $2,002 $912 $1,090 $268,470

2. Nov. 2018 $2,002 $908 $1,094 $267,376

50. Feb. 2023 $2,002 $703 $1,299 $206,403

90. June. 2026 $2,002 $515 $1,487 $150,663

120. Oct. 2028 $2,002 $367 $1,635 $106,913

150. Mar. 2031 $2,002 $199 $1,803 $57,021

180. Sept. 2033 $2,002 $7 $1,995 $0.00

total ---------------- ---------------- $90,803 $269,560 ----------------

>Payment number ​1​ is the first one in which the principal paid is greater than the
interest paid.
● The total amount of interest is ​$178,757​ (​more​ or ​less​) than the mortgage.
● The total amount of interest is ​≈66.3%​ (​more​ or ​less​) than the mortgage.
● The total amount of interest is ​≈33.7%​ of the mortgage.

>Notice how the 15-year mortgage reduced the amount of interest paid over the life of
the loan. Now consider again the 30-year mortgage and 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
$194,473​.
● The total amount of interest paid with the $100 monthly extra payment would be
$36,000​ (​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
≈14.5%​ (​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 ​8
months; that’s ​40​ months sooner than paying only the scheduled payments.

>Summarization:
For this project I chose a house with the list price of $336,950 and I was able to
determine what my interest rates and monthly payments would be if I were to choose a
30 or 15-year mortgage loan after putting in a down payment of 20% ($67,390). For the
30-year mortgage I found out that the monthly payments I would make would be $1389
and with a rate of 4.644%, the total amount that I would pay would end up being
$500,033. For the 15-year mortgage, I would end up paying $2,002 a month with an
interest rate of 4.060%, so I would end up paying only $360,363 on my mortgage. So
although I would end up paying more in the end, I would choose the 30-year mortgage
because it would be much more affordable on a month-to-month basis. However, if I
were to add $100 to the 30-year monthly payments I would only end up saving $36,000
in interest, plus I would have paid off the home in only 26 years and 8 months instead of
30 years.