Brent's Dream House

3 Stories, 4 Beds, 4.5 Baths and only $424,000!

Brent's New House

Brent just moved into the city of Overland Park, KS. He loves his job as a construction foreman and he hopes to settle down soon so he is buying a new house. This three story house is priced at $424,000 and contains 4 bedrooms and 4 and a half baths. The house has a beautiful newly renovated kitchen, a gorgeous patio, and a huge living room. It has a big finished basement that Brent can use to entertain because he loves having people over. The house is currently listed with Reese & Nichlos and can be finance with a rate with Bank of America.

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Brent's Finances

Brent can afford $2200 per month for his home.

Brent makes $60,000 a year as a construction foreman. When 30% is subtracted for taxes Brent makes $42,000 a year. When that number is divided by twelve, Brent's monthly income is $3500.

Brent's other monthly expenses

Brent also has to take into account the other things he spends his money on each month:

-$450 for his car

-$300 for food

-$300 for food

-$300 for insurance

-$250 for entertainment

After these expenses are all subtracted from his monthly income of $3500, Brent has $2200 to spend on a home.

With a loan from Bank of America at a rate of 4.625% and $2200 monthly payments, Brent found that he can afford a loan of up to $427899.42.

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Minimum Payment

Although Brent has the ability to pay $2200 per month for his home, the home he purchased was under his budget. Because the house he bought had a $424,000 loan at a monthly 30 year-fixed rate of 4.625%, Brent really only has to pay $2179.95 per month.

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Increased Principle

If Brent were to increase his monthly payments by 15% per month, Brent would have the ability to pay $2530 each month. In order to pay off his loan of $427899.42, Brent would be paying $2530 each month for 22.85775 years instead of $2200 for 30 years.

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The Difference

If Brent were to pay $2200 per month for 30 years, he would end up paying a total of $792,000 for his home. That is nearly double the value of the home.

($2200/month x 12 months/year x 30 years = $792,000)

If Brent were to pay 15% more than his current monthly payment, not only would it only take him 22.85775 months instead of 30, but he would only end up paying a total of $693961.29.

($2530/month x 12 months/year x 22.85775 years = $693961.29)

If Brent paid 15% more each month, he would end up saving a whopping sum of $98,038.71.

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APA References

No Author. (2014.January 2). Mortgages - Bank of America. Retrieved from

Jacobsen, M. (2014.January 2). Reece&Nichols. Retrieved from