Jenny Buys her First Home
Pre-Calc Finance Project
Monthly Budget
Jenny earns $40,000 a year but after taxes are taken out she earns $28,000. This makes her monthly income $2,333.33. But she has some expenses to account for:
- Monthly car payment of $230
- She has $20,000 in student loans that must be paid of in 10 years making her monthly payment $230.16
- Monthly insurance payment (15% of income) of $350
- Monthly food and clothing budget (15%) at $350
- Monthly entertainment budget (5%) at $116.67
- Monthly savings (13%) of $303.33
After subtracting out all of Jenny's expenses, her new net income is $753.17
Jenny's Home Budget
Jenny can spend $753.17 towards a house. A 30 year loan is required making it 360 payments. Bank of America has a 30 year fixed interest rate of 4.734%. This allows Jenny to buy a house worth up to $144,650.29
11007 W 115th Terrace
Overland Park KS, 66210
3 beds, 2 Full baths, 1,700 sqft
$143,000
Email: shanninreardon@reeceandnichols.com
Website: http://www.reeceandnichols.com/homes-for-sale/KS/Overland-Park/66210/11007-W-115th-Terrace-86924515
Location: 11007 W 115th Terrace
Phone: 913-906-3605
Max House Price
PV=144,650.29
Monthly Payment on New Home
R=744.58
$268,048.80 spent
Monthly Payment with 15% increase
N=273.13
$233,872.21
Divide N by 12. It will take 22.76 years to pay off mortgage.
Subtract $233,872.21 from $268,048.80
This will save Jenny 7.24 years and $34,176.59
Citations
(2014, January 1). Bank of America Corporation. Mortgage rates and loans. Retrieved from https://www.bankofamerica.com/home-loans/mortgage/mortgage-rates.go?scsCampCode=41634&dmcode=18098399970&cm_sp=CRE-HomeLoans-_-MortgagePurchase-_-CAT4C161_sc_rategrph-e_ar4a8slkmc8tnv_s.gif
(2014, January 1). Reece and Nichols. Retrieved from http://www.reeceandnichols.com/homes-for-sale/KS/Overland-Park/66210/11007-W-115th-Terrace-86924515
By Mallory McKee