Excellent House in Overland Park!
Nathan Thomas Hour 4 Scenario 3 Finance Project
How Much Can I Afford?
A general rule to mortgages is that you should not pay over 28% of your income per year, and for my scenario that would be equal to $933.33. At that monthly payment, with a Bank of America loan with a fixed rate of 4.625% would equal $181500 total for a loan, leaving $181500 as the maximum price for a house I could afford.
How Much Would I Have to Pay For This House?
The minimum payment for a loan at the amount listed above would be $933.16 a month, but the house I found is listed at $143,800. This easily puts it in the budget I can afford. After working as a bank teller for three years, I have over $50,000 saved up after all my expenses, and I plan to pay a 20% down payment. After the down payment, I have $115,040 to pay monthly, leaving my monthly payments at $591.46, allowing me to easily be able to afford this house.
A view of the house I plan to buy from the front.
View of Kitchen
A view of the kitchen in the house.
A view of both the backyard and the back of the house.
How Much Would I Save at a 15% Monthly Payment Increase?
If my monthly payment of $591.46 was increased by 15%, that would give me monthly payments of $709.75. When the entire loan is payed back, at a monthly rate of $591.46 for 30 years, that would put me at $212,925.60 total. At a 15% increase, a monthly rate of $709.75 would bring the total time to pay the loan to 21.23 years, and would cost $180,815.91. That would not only save me $32,109.62 but would also save me 8.77 years.
Bank of America Corporation, (2014). Monthly mortgage
payment calculator. Retrieved from Bank of
America Corporation website: