House Hunting!

Honors PreCalc - Scenario 3

Jenny's Scenario

I attended college for two years, but had to drop out with $20,000 in student loans at a 6.80% interest rate. I have worked as a bank teller for the past three years and make $30,000 annually. $400 car payments are paid monthly for my car. I am very excited to buy my first home in the next few months and look forward to the experience.

Monthly Payments

Student Loan Payment: $230.16

Car Payment: $400

Monthly Income: $2,500

Total: 2,500 - (230.16 + 400) = $1,869.84

Spending Money

$600 a month to spend on the house:

  • food: $400 a month
  • Gas: $60 a month
  • Clothes: $100 a month
  • Insurance: $200 a month
  • Savings/Etc.: $200 a month

$1,869.84 - (500 + 60 + 100 +200 +200) = about $900

Total amount for house:

900 * (12*30) = $324,000

10331 Reeds Drive, Overland Park KS, 66207

$189,950

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Mortgage

Can afford to borrow:

30-year fixed loan rate is 3.768% (Bank of America 2/13)

PV = $197,346.22

Monthly Loan Payment

Minimum monthly payment: $866.27

Increased by 15%: $996.21

Save:

23.7 years to pay off instead of 30

$866.27 * (12 * 30) = $311,857.20

$996.21 * (12 * 23.7) = $283,322.12

$311,857.20 - $283,322.12 = $28,535.08

Amortization Table

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APA Citations

10331 Reeds Drive, Overland Park, KS 66207 | MLS 1962638 | Listing Information. (n.d.). Retrieved February 15, 2016, from http://www.reecenichols.com/homes-for-sale/10331-Reeds-Drive-Overland-Park-KS-66207-161580168


Mortgages - Home Mortgage Loans from Bank of America. (n.d.). Retrieved February 15, 2016, from https://www.bankofamerica.com/home-loans/mortgage/overview.go


Pinola, M. (2015, April 8). How Much Money Do You Spend on Food Every Month? Retrieved February 15, 2016, from http://lifehacker.com/how-much-money-do-you-spend-on-food-every-month-1696492352