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Lisa Monge

HOME BUYING PROJECT


San Diego,CA

Occupational
Therapist
Treat injured, ill, or
disabled patients
through the
therapeutic use of
everyday activities.
They help these
patients develop,
recover, and improve
the skills needed for
daily living and
working.

Annual &
Monthly Salary

28% of Monthly Salary


$6,606.42*. 28

Annual Salary in San


Diego

= $1,849.80

$79,277

30 year loan

Monthly Salary
79,277/12
=$6,606.42

Maximum you can borrow:


1,849.80 [(1+.03750/12)^12.30 -1) /(.03750/12)/
(1+.03750/12)^12.30

=$399,425.12

Home Buying Project

Lisa Monge

Home
Information
Address: 15905
Avenida Villana
Unit 80
2 bedroom
2 bathroom
1,240 square

footage

November 1, 2016

Closing Costs:
$419,900*0.03
=$12,597
PMI costs:
$356,915*0.0075
=$2,676.86 Annual PMI

Purchase Price:

$2676.86/12

$419,900

=$223.07 Monthly PMI

15% DownPayment
419,900 * .15
=$ 62,985

Property Tax:

$419,900*0.0125
=$5,248.75 Annual Tax
$5,248.75/12
=$437.40 Monthly Tax
Home Insurance/HOA Dues

$446
Estimated Utility Costs:
$300

Home Buying Project

Lisa Monge

November 1, 2016

30 YEAR LOAN
Rate: 3.750%
Monthly Mortgage Payment:
356,915 (1+.03750/12)^12*30 *(.03750/12) / [(1+.03750/12)^12*30-1)
=$ 1,652.93
Total Paid including Down Payment
$1,652.93*12*30
= $595,054.80
$595,054.80 + $ 62,985
=$ 658,039.80
Total Interest Paid
$ 595,054.80 - $356,915
= $ 238,139.80

On payment 285 the majority of my payment is going towards the


principal instead of the interest. On payment 111 I can stop paying PMI. If I
sold my home after 7 years, I would still owe $305,369.42 on my home.
Total Monthly Housing Costs $1,652.93 + $223.07 +437.40 + 446 +
300=$3,059.40

Home Buying Project

Lisa Monge

November 1, 2016

15 YEAR LOAN
Rate:
3.000%
Monthly Payment:
356,915(1+.03000/12)^12*15*(.03000/12)/[(1+.03000/12)^12*15-1]
=$ 2,464.79
Total Paid Including Down Payment
2,464.79*180
=$443,662.20
443,662.20 +62,985
=$506,647.20
Total Interest Paid:
443,662.20 - 356,915
=$86,747.20
On payment 1 the majority of my payment is going towards the principal
instead of the interest. On payment 44 I can stop paying PMI. If I sold my
home after 7 years, I would still owe $210,134.59 on my home. Total
Monthly Housing Costs $2,464.79 + $223.07 +437.40 + 446 +
300=$3,871.26

Home Buying Project

Lisa Monge

November 1, 2016

PROS AND CONS


Of 30-Year Loan vs. 15-Year Loan

30 Year Loan
Monthly Pymt

Total Monthly Pymt Total Paid

$1,652.93

$595,054.80

$658,039.80

Total Interest
$238,139.80

Pros of a 30 year loan


Lower monthly payments compared to the 15 year loan.
Lower monthly payments allow you to save money for other everyday expenses.

Cons of a 30 year loan


Longer monthly payments compared to a 15 year loan
Paying more in interest compared to a 15 year loan
Overall paying more compared to a 15 year loan

15 Year Loan
Monthly Pymt

Total Monthly Pymt Total Paid

$2,464.79

$443,662.20

$506,647.20

Total Interest
$86,747.20

Pros of a 15 year loan


Larger monthly payments which helps pay off the loan faster
Overall paying less compared to a 15 year loan

Cons of a 15 year loan


Larger monthly payment

Home Buying Project

Lisa Monge

November 1, 2016

RENTING VS.
BUYING
30.Costs of Renting vs. Buying
Renting

Monthly Cost

Buying

$1,453.33

$1,652.93

Annual Cost

$17,439.96

$19,835.16

5 Year Cost

$87,199.80

$99,175.80

Overall, there are some pros and cons between renting and buying. Some
pros about renting is the monthly payment is smaller compared to the 30 year
loans monthly payment. Also a years worth of monthly paying is less than a
years worth of a 30 year loans monthly payments. Also renting if you only plan to
live there for a few years renting is a better option. Some cons of renting is that
the monthly payments you give one day you will not be able to own the home,
since you chose to rent the home. By choosing to buy the home, has some pro as
well. Some pros of buying a home is the monthly payments you give goes
towards the home and one day you will be able to own the home. Another pro of
buying a home is financially your payments are going towards the home and not
being wasted. A con of buying is if you do not plan to live there for more than a
few years, you took out a loan for no reason. Overall, both sides of renting and
buying have their pros and cons. It depends how financially stable you are at the
point of you life to decide if you want to rent or buy. Buying a home id good if
you plan to live in the home for many reason. Renting is also a good option if you
plan to only live there for a few years.

Home Buying Project

Lisa Monge

November 1, 2016

REFLECTION

Home Buying Project

Lisa Monge

November 1, 2016

Overall, what I learned in this project is that buying a home is expensive.

Not only do you have to pay mortgage payments, but also other monthly
payments that go towards your living expensive. This project showed that
owning a home is more expensive than renting a home. My feelings toward
owning a home now is living on your own is far more expensive than I thought it
would be. Monthly payments add up which ends up being a lot money. If I were
move put I would most likely rent, because its cheaper to rent a home, and since
I wouldnt plan to live forever in my first home it would make more sense to rent
now doing this project. Even though the numbers a slightly different, it still
makes a difference in all the monthly payments.

Home Buying Project

Lisa Monge

Home Buying Project

November 1, 2016