Finance Project

Shayla Panowicz

Monthly Amount

Jenny makes $28,000 a year with taxes taken out which gives her $2333.33 a month. She has to pay off her student loans of $20,000 in 10 years which means she has to pay $230.16/mo and she has a car payment of $230/mo . After all the payments she ends up having $1873.17/mo left to spend. My mother told me that you should not spend more than 25% of your income on mortgage so Jenny can spend up to $468.29/mo on a house.


Total Amount

Jenny can spend $468.29/mo on a house with an interest rate of 4.625% for a 30-year fixed rate loan. For Jenny to buy a house she can borrow up to $91,082.28.


Minimum Monthly Payment

My house costs $86,400 and once the mortgage has been approved Jenny's minimum monthly payment for her house would be $444.22/mo. To find that I used an interest rate of 4.625% and plugged in 360 for the number of months, the interest rate, the present value of the house and put it all into my calculator and found the monthly payment.


Increased Principle

If Jenny paid the minimum monthly payment of $444.22 she would be paying a total of $159,919.20 after 30 years for her house. If Jenny increased the minimum monthly payment by 15% she would be paying $510.85 a month and have it all paid off in 22.86 years. By the end of 22.86 years she would have spent $140,136.37 for her house, which saves her a total of $19,782.83.


Citations

Wells Fargo. (2014, January 2). Today’s Mortgage Rates. Retrieved from https://www.wellsfargo.com/mortgage/rates/

Platnum Realty LLC. (2013, November 12). 725 S Ridgeview Road. Retrieved from http://reeceandnichols3.reachlocal.net/homes-for-sale/KS/Olathe/66061/725-S-Ridgeview-Road-104603266



Big image