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Mortgage Project
Alhan Samimi

Payment
Purchase

Price: $201,000

Down

Payment: $20,100
Amount: $180,900

Mortgage

30 Year Mortgage
P

M T = P(r/12)/ 1- (1+r/12)^-12y

180,900(0.04975/12)/1-(1+0.04975/12)^-12(30)
180,900(0.00414583)/1-(1.00414583)^-360 749.980647/1-.22550487507 749.980647/ $968.35

0.77449512492

Amortization Schedule
Monthly

Payment for a 30 year mortgage

$968.35

Total

interest paid over 30 years

$167,704.53

Total

amount paid

$348,604.53

Observation
The

payment for interest is higher the first couple of years and then after about 16 years more of your monthly payment goes toward the principle. of first payment when more of the payment goes toward principal then interest

Number

194

Minimum Monthly Take Home Pay

n x 35%= $968.35

n x .35= $968.35/.35
= $2,766.70

Minimum Gross Annual Salary


73%

x n= 2,766.70

.73

x n = 2,766.70/.73

n =$3,790

Selling the House


F=

Pe^(rt)

F=
F= F=

201.000e^(.04x10)
(201.00)e^(.4) $299,856.76

Selling the House Continued


Selling

price of your house

$299,856.76

Original

down payment

$20,100

Mortgage

paid over ten years

$116.202

The

principal balance on your loan after ten years

$147,036.48

10

Gain or Loose
You

gained money because you only paid a total of $283,338.48 after ten years and you sold the house for $299,856.76. So you gained $16,518.28

11

15 Year Mortgage
P

M T = P(r/12)/1-(1+r/12)^-12y

180,900(0.04735/12)/1-(1+0.04735/12)^-12(15)
180,900(0.00394583)/1-(1.00394583)^-180 713.800647/1-(0.49220902087) 713.800647/0.50779097913 $1,405.70

12

Amortization Schedule
Monthly

Payment for a 15 year mortgage

$1,405.70

Total

interest paid over 15 years

$72,125.51

Total

amount paid

$253,025.51

Number

of first payment when more goes toward principal than

interest

13

Additional $100
Length

of time to pay off loan with additional payments of $100 per month
13.6

Total

interest paid over the life of the loan with additional $100 monthly payment
$64,713.29

Total

amount paid with additional $100 monthly payments

$245,613.29

14

Compare

If you add $100 to your monthly payment then you would be bale to pay off your mortgage about 2 years earlier. You would end up gaining $ 7,412.22 overall

15

Reflection
This

project completely changed the way I think about buying a home. I realized that you can make a pretty good profit if you are smart about paying off your loan and putting your house on the market when the value of real estate has increased. Even though before this project I had a general idea of how the home buying system works, this project broadened my view on how critical taxes, loans, and mortgages are in the real world, and if if you make a simple mistake it could ruin your whole investment. Also I came to a conclusion that it makes more sense if you pay off your loan in a shorter amount of time because you would have to pay less interest which would help you save money in the end.