Jenny's New House

By Michael Burns, Mrs. Stein Hour 5

Payment Capabilities

The base income is $40,000.



  1. After the government takes 30%, $28,000 a year remains.
  2. That makes $2,333.33 a month.
  3. Student loans end up being monthly payments of $230.16.
  4. $230 is put towards a car loan each month.
$1,873.17 remains to spend for each month.


Maximum Purchasing Ability

Each month, spending includes:

  • At least $250 for gas
  • At least $250 for food
  • At least $200 for electricity and water bills
  • At least $50 for other misc. purchases


The maximum monthly payment with the money left is $1,123.17.

That makes the maximum price for a house for Jenny $218,456.27.

The Choice

Jenny chooses 2012 W 139th Street, in Leawood. It has an asking price of $179,000.




  • Bank of America gives her a loan of 30 years with an interest rate of 4.625%.
  • She has to pay a minimum of $920.31 a month.
  • If she pays 15% more a month that is $1,058.36 a month.
  • That takes only 22.86 years!
  • Even better, it saves her $41,014.06 compared to the original payments!!



Sources

Thomas, K. (2013, December 19). 2012 W. 139th Street. Retrieved from: http://www.reeceandnichols.com/homes-for-sale/KS/Leawood/66224/2012-W-139th-Street-107285342.



Unknown. (2013, December 19). Mortgage, Buy a Home. Retrieved from: https://www.bankofamerica.com/home-loans/mortgage/overview.go.