1.) Find a house: House Price is ($350,000) 2.) Use interest rate of: 6% compounded monthly...

1.) Find a house: House Price is ($350,000)

2.) Use interest rate of: 6% compounded monthly for a 30 year loan and 5.5% compounded monthly for a 15 year loan.

3.) Determine how much a monthly principal and interest payment on your house would be if you financed it:

a. for 30 years

b. for 15 years

c. for 30 years with 20% down

d. for 15 years with 10% down

4.) How much would you pay for the home over the length of the loan under each scenario? How much of this is interest?

5.) A mortgage payment is made up of principal and interest payments from your loan as well as taxes and insurance payments. If the amount for taxes and insurance doubles your loan payment, how much would your mortgage payment be under each of the four scenarios?

6.) Which option do you feel is best? Why?

Expert Solution

Colby Messinger answered 2 years ago

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