# The House in Overland Park

## Before the loan calculations

In scenario 2, Harper makes 70,000 dollars per year. This number was multiplied by .7 because 30% of her salary goes to taxes. This gave a value of 49000 dollars which was divided by 12 to get the income per month from her job after taxes. The value was 4083.33 dollars per month which then had to be subtracted by 325 every month because of her car payments. Harper now makes 3758.33 dollars per month after taxes and car payments. She has a 35,000 dollar student loan that needs to be payed back in 10 years. Using the calculator app, the student loan costs 402.78 dollars per month for 10 years to be paid back at the rate of 6.8%. This finally adds up to a total of 3355.55 dollars per month she earns after all expenses.

## The House Purchase

The house Harper wants to get would cost 320,000 dollars. After applying the fixed rate of 4.625% for 30-year loans from Bank of America and using the calculator application, Harper would have to pay 1645.25 dollars per month to have the house paid off at the end of the 30 year time period. This means she will have to subtract 1645.25 from 3355.55 which equals 1710.3 dollars per month. I came to the conclusion that this would be a safe and smart house choice for Harper because she will still be able to sustain a good living with 1710.3 dollars per month she keeps.

## The Comparison

Using the loan calculated above, Harper would pay 1645.25 dollars per month for 360 months (30 years) which would be a grand total of 592,290 dollars total and it would take 30 years.
If the 1645.25 principal value was increased by 15% which can be calculated as 1645.25 * 1.15 = 1892.04 then using the calculator application Harper would pay for 275 months or 22.92 years. The grand total of the increase principle value would be 1892.04*275 =520,311.
This means by increasing the principle value by 15%, Harper saves 71979 dollars and about 8.08 years off of her house mortgage.