# The Jellybean Jenny House

## Jenny the Bank teller

Jenny can afford \$936.58 each month to pay for a mortgage. This \$936.58 represents 50% of her net income of \$1873.17 after paying her \$230.16 for her student loans and taking away 30% for taxes from her gross annually salary of \$40,000. I believe 50% of her net income is enough to cover all other miscellaneous expenses (i.e. food, entertainment, insurance, utilities, etc.).

## The Calculations

Jenny can afford to borrow \$184,197.90 if she spends the entire \$936.58 per month for a 30-year fixed mortgage using the current Kansas City average of 4.53% annual interest.

The current Kansas City average is 4.53% annual interest for a 30-year fixed mortgage.

The minimum payment required each month would be \$936.58 but this includes principle payments.

If Jenny increased her monthly payment to \$1077.07 (\$936.58 * 1.15), she would reduce her payment by 7 years (275.3010142 payments instead of the full 360 payments) and she would save \$40,650.34 in interest (\$337,168.80 - \$296,518.46 note below).

Note: \$936.58 * 360 payments = \$337,168.80 and \$1077.07 * 275.3010142 payments = \$296,518.46

## References

Bank Rate

Reece and Nichols Relators Inc.