Financial Fun

Afford Monthly

I decided that I could spend \$1750.00 monthly on my house based on my monthly income of \$3355.55. I reached that monthly income by taking 30% of my \$70,000 income for taxes, so I was left with \$49,000 or \$4083.33 monthly and after student loans and car payments totaling \$727.78 per month I was left with \$3355.55 per month. After I did research I decided that I should spend 30% of my gross income (before taxes) on housing, which equaled \$1750 maximum for housing. I decided that was a good amount because I am living alone and that gives me \$1605.55 a month leftover for all other necessities.

Afford to Borrow

Using my finance app I found that I could borrow a maximum of \$313,110.000 for housing. I reached this number using my maximum monthly payment of \$1750, I found an interest rate of 4.75% (Wells Fargo). When I found a house that I liked for \$300,000 I plugged that in as my present value and then I found that I could borrow \$313,110.00, although I only borrowed \$250,000 because the house I found was only \$300,000.

Minimum Mothly Payement

Using my finance app again I reached my minimum monthly payment of \$1564.43 based on a house of \$300,000, interest rate of 4.75%, and payments monthly for 30 years.

Minimum Monthly Payment + 15%

My minimum monthly payment + 15% equaled \$1799.99. Using this number plugged in to the present value formula with the variable "t" unknown I found "t" to equal 22.7 years or 22 years and 8 months. Therefore, cut off 7 years and 4 months of house payments and I would end up saving \$72,043.23. It would be a tough decision to up my payments because I would have to be extremely careful with my money because it is over my maximum monthly payment.