Scenario 2

Drew Shafer

General Information

Harper has an annual salary of $70,000. After taxes she has $49,000, or $4,083.33 per month, available to her. Harper is also paying off $35,000 in student loans and has a $325 monthly car payment.

Monthly Expenses

Harper's monthly expenses include:


Student Loans: $402.78

Car Payment: $325

Gas for Car: $80

Food: $300

Cricket Pro Wireless Phone Plan: $60

Direct TV Premier Plan with NFL Sunday Ticket Pass: $89.99

House Gas Bill: $250

House Electric Bill: $150

House Water Bill: $70

Average Kansas Car Insurance: $120

Google Fiber Internet: $70

Other Necessities: $205

Savings Account Monthly Deposit (20% of Monthly Income): $816.67


Total Expenses: $2,939.45

House Budget and Pricing

After expenses Harper will have a maximum monthly house payment of $1143.88. The Bank of America has a 30 year fixed mortgage rate of 3.75% allowing Harper to afford a $246,996.65 house, but Harper has found a house she likes for only $245,000.
This house is located at 16469 S Sunset St. Olathe, KS 66062, and it has 4 bedrooms, 3 full bathrooms, 1,900 square feet and a 2 car garage. Harper's minimum monthly payment for the house is $1134.63 and the total amount she will have payed after paying of her 30 year loan is $408,466.80.

If Harper Raised Her Monthly Payment

Due to her house choice, Harper can only raise her monthly payment by $9.25 instead of by 15%. Some might say this is really pushing her budget but due to Harper saving 20% of her monthly income, she can afford to be a little closer to her maximum budget. However with this $9.25 increase, Harper's monthly payment will become $1143.88. So Harper will only make 355 payments over 29 years and 7 months. With this increased payment Harper will spend $406,031.69 saving her $2,435.16 on the total house price.

Amortization Table

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References

(2016, February 16). ReeceNichols. Retrieved from http://www.reecenichols.com/.


(2016, February 16). Bank Of America. Retrieved from http://www.bankofamerica.com/.


(2016, February 16). Cricket Wireless. Retrieved from http://www.cricketwireless.com/.


(2016, February 16). Direct TV. Retrieved from http://www.directv.com/.


(2016, February 16). Value Penguin. Retrieved from http://www.valuepenguin.com/.


(2016, February 16). Google fiber. Retrieved from http://www.fiber.google.com/.