Jenny's First House

Income and Expenses

Jenny's annual income after tax is factored in is $21,000, which translates to $1,750 per month. Her monthly expenses include a $230.16 payment to ensure her student loans are paid off in 10 years. Other expenses include $150 for food, $60 for utilities, $100 for gas, transportation, entertainment and other expenses, as well as a $400 car payment. Unfortunately, Jenny cannot afford a cell phone or car insurance and has to spend less money on entertainment in order to make the possibility of taking on a monthly home payment realistic. The maximum amount she will be able to afford for a house payment is $809.84, but some money will be left over in reserve. APR for a $165,000 Home Loan is %3.875.

Quicker Payment Option

If she wanted to pay her home off more quickly, she could increase the monthly payment to $931.32. She would save 7.2 years as a result of this and $35,000