Finance Project

Katie Latinis

Monthly Payment

After taking out taxes, student loans, and a car payment Jenny has $1,873.17 a month left to spend. According to The Wall Street Journal website you should not spend more than 28% of your monthly income on a mortgage. That means Jenny can put $524.49 towards a house a month.


Total Amount

Based on the fact that Jenny can spend $524.49 a month on her house and that the interest rate for a 30-year fixed rate loan is 4.625% the total amount she can spend is $102,013.17.


Minimum Payment

The house I found cost $101,000 so the minimum monthly payment in order to pay off the loan in 30 years with an interest rate of 4.625% is $519.28.


Increased Principle

The total amount that it would cost Jenny if she paid off the loan in 30 years is $188,816.40. By increasing the minimum monthly payment by 15% it would take 22.86 years and would cost a total of $163,815.67. That saves 7.14 years and $25,000.73.


References

How much should you spend on a home. (n.d.). Retrieved from http://guides.wsj.com/personal-finance/buying-a-home/how-much-you-should-spend-on-a-home/


Reece & nichols. (n.d.). Retrieved from http://www.reeceandnichols.com/


Wells fargo. (n.d.). Retrieved from https://www.wellsfargo.com/