# House Hunting!

## 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

## 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

## 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