Question

A mortgage is a loan used to purchase a home. It is usually paid back over a period of 15, 20, or 30 years. The interest rate is determined by the term of the loan (the length of time to pay back the loan) and the credit rating of the person borrowing the money. Once a person signs the documents to borrow money for a home, they are presented with an amortization table or schedule for the mortgage that shows how much of a monthly payment goes toward interest and how much goes toward the principal (the amount borrowed). A mortgage calculator can be used to determine the monthly payments for a mortgage. One such calculator can be found with the following link. mortgage payment calculator It is a good idea to test the mortgage calculator. You should find that the monthly payment on a $200,000, 30-year loan with zero down at 5%, is $1,073.64. For a particular home, the mortgage amount needed to purchase the home is $135,000. There are 2 options for a fixed-interest-rate loan. One option is a 15-year loan and the other option is for a 30-year loan. Use a mortgage calculator to find the monthly payment. Then determine the total amount paid out over the term of the loan and the amount of interest paid during the term of the loan. Part 1 Exercises: Find the following for a 15-year loan of $135,000 with an interest rate of 2.75%. 1. What is the monthly payment? 2. What is the total amount paid for the 15 year term of the loan? 3. What is the interest that has been paid during the 15 year term of the loan? Find the following for a 30-year loan of $135,000 with an interest rate of 3.5%. 4. What is the monthly payment? 5. What is the total amount paid for the 30 year term of the loan? 6. What is the interest that has been paid during the 30 year term of the loan? Home ownership has other expenses, including property taxes, homeowner’s insurance, and utilities. The annual property tax can be estimated as 1% of the amount borrowed and the annual homeowner’s insurance can be estimated as 2% of the amount borrowed. 7. For a mortgage of $135,000, find the following. a. What is the MONTHLY amount of property tax. b. What is the MONTHLY amount of homeowner’s insurance. 3 8. If the monthly utilities can be estimated to be $200, find the following. a. For the 15 year loan, find the total monthly payment, including mortgage, tax, insurance, and utilities. b. For the 30 year loan, find the total monthly payment, including mortgage, tax, insurance, and utilities. Housing expenses are an important part of a personal budget. Use the internet to research what percent of a household’s monthly income should be used for housing. If the median household income in Volusia county is $3000 per month, answer the following questions. 9. a. What percent of household income should be used for housing? b. Could a typical Volusia county household afford the home with the 15-year mortgage? Why or why not? c. Could a typical Volusia county household afford the home with the 30-year mortgage? Why or why not? 10. What other expenses should a person consider for their monthly budget? How might these expenses affect the decision of whether to purchase a home?

Answer #1

Consider a home mortgage of $150,000 at a fixed APR of 6% for
30 years.
-. Calculate the monthly payment.
-. Determine the total amount paid over the term of the
loan.
- Of the total amount paid, what percentage is paid toward the
principal and what percentage is paid for interest.
a. The monthly payment is what?
(Do not round until the final answer. Then round to the nearest
cent as needed.)
b. The total amount paid over the...

A home was bought with a $400,000 mortgage. The interest rate
was 4.4% and the term is 30 years (paid monthly). If they are
selling the house at the end of year 8, what is the loan payoff
amount? The monthly payment is $2,003.04 per month.

Assume that you have found a home for sale and have agreed to a
purchase price of $254800$254800.
Down Payment: Assume that you are going to make a
10%10% down payment on the house. Determine the amount of your down
payment and the balance to finance.
Down Payment=$Down Payment=$
Loan Amount=$Loan Amount=$
Monthly Payment: Calculate the monthly payment for
a 30 year loan (rounding to the nearest cent, so rounding to two
decimal places). For the 30 year loan use...

1.) Consider a home mortgage of $150,000 at a fixed APR of 6%
for 30 years.
-. Calculate the monthly payment.
-. Determine the total amount paid over the term of the
loan.
- Of the total amount paid, what percentage is paid toward the
principal and what percentage is paid for interest.
a. The monthly payment is what?
(Do not round until the final answer. Then round to the nearest
cent as needed.)
b. The total amount paid over...

Robert borrows $235,000 to purchase a home at an interest rate
of 6% and a term of 30 years.
a) What is the monthly payment on this mortgage?
b) Considering the first month’s payment, how much of the
payment is interest?
c) At the end of the 30 year term, what is the total amount of
interest paid?

A loan officer states, "Thousands of dollars can be saved by
switching to a 15-year mortgage from a 30-year mortgage." Calculate
the difference in payments on a 30-year mortgage at an interest of
0.75% a month versus a 15-year mortgage with an interest rate of
0.7% a month. Both mortgage are for $100,000 and have monthly
payments.
1) What is the monthly payment committed by the 30-year
mortgage? And the total payment?
2) What is the monthly payment committed by...

Your friend decides to purchase a home and takes a 15-year,
$100,000 mortgage with a mortgage rate of 4.8%. Her monthly
mortgage payment would be $780.4. Please fill in the blanks.
Month
Beginning balance of loan
Monthly payment
Monthly
interest rate
Amount applied to interest
Amount applied to principal
Ending balance of loan
1
$100,000
$780.4
a.
b.
c.
d.
2
e.
f.
g.
h.
i.
j.

Estimate the affordable monthly mortgage payment, the affordable
mortgage amount, and the affordable home purchase price for the
following situation. (Refer to Exhibit 9-8 and Exhibit 9-9) (Round
time value factor to 2 decimal places, intermediate and final
answers to the nearest whole number.) Monthly gross income $ 3,400
Down payment to be made (percent of purchase price) 10 Percent
Other debt (monthly payment) $ 215 Monthly estimate for property
taxes and insurance $ 255 30-year loan 7.5 Percent
what...

(a) After making payments of $911.10 for 6 years on your 30-year
loan at 8.1%, you decide to sell your home. What is the loan
payoff? (Round your answer to two decimal places.)
(b) A homeowner has a mortgage payment of $995.10, an annual
property tax bill of $592, and an annual fire insurance premium of
$280. Find the total monthly payment for the mortgage, property
tax, and fire insurance. (Round your answer to the nearest
cent.)
(c) Suppose you...

loan officer states, "Thousands of dollars can be saved by
switching to a 15-year mortgage from a 30-year mortgage." Calculate
the difference in payments on a 30-year mortgage at an interest of
0.75% a month versus a 15-year mortgage with an interest rate of
0.7% a month. Both mortgage are for $100,000 and have monthly
payments.
1) What is the monthly payment committed by the 30-year
mortgage? And the total payment?
2) What is the monthly payment committed by the...

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