Modern Townhouse in Lenexa
Pre-Calc Finance Project Scenario 2 Hour 2
An interest rate for a 30 year fixed loan would be 4.875% each month according to Bank of America, taking into account a 20% down payment of the $85,000 cost of the home, which is $17,000
For this house including all major expenses the amount that Harper can afford is about $350- 400 per month. This is because once homeowners insurance is paid ($101), home warranty is paid ($74.92), home security is paid ($37) and Homeowners Associations dues are paid ($131) Harper will still have $2940.71 to spend on house payments per month and other expenses. Also, Harper will have her student loans paid off in 8 years so she will not have to worry about that in 8 years giving her $473.70 more to spend a month. Her monthly cost for this home would be $359.86, with a 30 years fixed loan with an interest rate of 4.785%. It would make sense for her to have this much because of her income without living in a house.
If Harper borrowed $68,000 from the bank she would be able to pay it off after 30 years with a $359.86 monthly cost. Though she is borrowing close to what she makes in a year without taxes, the amount of money left over, $2580.85 per month, she can pay for other expenses and put away a steady amount of money to cover her house payments if she has a financial problem in the future. She will also have to pay monthly taxes of $130.42 for her house, which will still leave her a large amount of money to save, invest and spend-$2450.43
Payment Increase by 15% Effects
$359.86 x .15 = $53.98
$53.98 + $359.86 = $413.84 monthly payments
$413.84 x 22.66 x 12 = $112,419.64 (22.66 is equal to 22 years and 8 months)
$359.86 x 360 = $129,549.60
$129549.60-$112419.64 = $17,129.96
So Harper will save $17,129.96 if she increased her monthly payments by 15%
She would also pay off her home around 8 years earlier than she would have in a 30 years fixed loan.
A Look At The Town House
The townhouse has two bedrooms, and 1 full bath and two half baths. Two bedrooms are smart to have even though Harper is living by herself because she might have out-of-state relatives who might visit and need a place to stay. Through buying this house Harper has access to tennis courts and a swimming pool.
ADT. (2013, December 27). ADT. Retrieved from https://security.adt.com/pricing.html
American Home Shield. (2013, December 27). American Home Shield. Retrieved from http://quote.ahs.com/homewarranty?MarketingPartner=Bing&AdType=CPC&mkwid=52de2jPw|pcrid|1887013945&mm_campaign=4ba1af906554aede504a53d63e96a2c9&keyword=home%20warranty&utm_source=bing&utm_medium=cpc&utm_term=home%20warranty&utm_campaign=Home+Warranty+-+Exact+A1+Home+Warranty&src=
Bank of America. (2013, December 27). Bank of America. Retrieved from https://www.bankofamerica.com/home-loans/mortgage/mortgage-payment-calculator-results.go
Dryer, M. (2013, August 20). Reece and Nichols. Retrieved from http://www.reeceandnichols.com/homes-for-sale/KS/Lenexa/66215/12204-W-79TH-Terrace-98391822
Safeco Insurance. (2013, December 27). Safeco Insurance. Retrieved from https://quote.safeco.com/consumer/home/safeco/EstimateCO.aspx?id=ea191d8e&zip=66215&dc=SAFE&bid=20b630a3-27da-4b22-9140-3cafe8ca9fb0