In: Finance
You are considering 3 homes
–Home 1- 200,000
–Home 2 – 300,000
–Home 3 – 400,000
Assume: Mortgage rates are 3.5% for 30 years and 2.875% for 15 years. You have $60,000 to put down and cannot pay more than $1,600 per month for total mortgage payment. You must pay PMI for loans with less than 20% down =$150.
Determine:
Part (1):
Since there is a cap of $1,600 permonth for total mortgage payment, the following are affordable:
Home-1 for 30 years
Home-1 for 15 years and
Home-2 for 30 years.
Details of calculations as follows:
Part (2):
226 monthly payments (18 years and 10 months) are required to pay off 1/2 of the mortgage. Relevant portion of amortization schedule as follows: