# Harper's Home 2016

### Alycia Martin-Hnrs PreCalc- Colwell-Hr.6

The first thing that Harper needs to consider is how much of her monthly salary has to be spent to accommodate her lifestyle, and the maintenance of her new home. As according to various websites, companies, and local averages, this chart shows a break down of what payments would be necessary to sustain a living in the Overland Park area.

## Finding a Minimum Monthly Payment

In order to decide on a minimum monthly payment, as based off of an affordable loan, there is a multi-step process illustrated in the following chart (and outlined below)..

1) To find the salary per month that Harper receives, her annual salary of \$70,000 is divided by 12 to get a quotient of \$5,833.33.

2) The maximum amount of money that could be set aside for paying off a house loan can be determined by subtracting the monthly expenses total (\$3,688.68) from Harper's monthly payment (\$5,833.33) to get a difference of \$2,144.65.

3) At this point, the amount of monthly salary left and the 30-year fixed interest rate (as according to Wells Fargo) can be used in the finance application to find an affordable loan. The value solves to be \$456,078.44, which can safely be rounded down to \$450,000.00.

4) From there, the \$450,000.00 can be used in the finance app to find a minimum monthly payment, which would amount to \$2,116.06.

## Comparing Rates

Should Harper choose to take the loan, and chooses to pay each payment exactly, it will take her the full 30 years to pay off the \$450,000.00 plus interest. In the chart below, the finance app was used to add 15% to each monthly payment, and to determine how long it would take to pay off the loan with the increased monthly payment. From there, the increased monthly payment could be multiplied by the amount of years needed, and then subtracted by the total amount payed if the original payment was paid every month for thirty years to find how much Harper could save by paying more each month.

## Amoritization Schedule

According to the original payment plan, this is a sample Amortization Schedule for the first year of Harper's payment plan...

## Budget

Seeming as how every house price is negotiable, a reasonable budget would be a house anywhere from \$450,000.00 to \$480,000.00. Such options in the Overland Park area might include...