Mary is purchasing a home for 294000$. She will finance her mortgage for 15 year
ID: 2766630 • Letter: M
Question
Mary is purchasing a home for 294000$. She will finance her mortgage for 15 years with 4% interest. She is paying 20% down payment of the purchase price. Mary's annual taxes are 2564$ and her annual homeowner insurance is 1778$. 1- Find the amount of the mortgage. 2- Find the down payment. 3- Find the monthly payment of principal and interest only. 4-Find the total interest she is paying over the 15 years. 5- Find the PITI payment. 6- Calculate the monthly payment and the total interest Mary need to pay if she decided to make the loan for 30 years instead of 15 years. 7- How much she saves on interest if she decided to pay out in 15 years compared to 30 years. 8- Find the interest portion and the principal portion for the first payment of the 15 years loan. 9- Make an amortization schedule for the first two payments of the 15 years loan.
Explanation / Answer
1) Mortgage amount = 80% of Home price = 294,000*80% = $235,200
2) Down payment = 20% of Purchase price = 294,000*20% = $58,800
3) Monthly payment (EMI) = PMT = (235,200,4/12,15*12) = $1,740
4) Total Interest = (1740*180) - 235,200 = $78,000
Maximum of 4 questions can be answered at a go