Mary is purchasing a home for 294000$. She will finance her mortgage for 15 year
ID: 2767818 • Letter: M
Question
Mary is purchasing a home for 294000$. 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$.
5- Find the PITI payment.
6- Calculate the monthly payment and the total interest Mary need to pay if she decided to make the loan for 30 years instead of 15 years.
7- How much she saves on interest if she decided to pay out in 15 years compared to 30 years.
8- Find the interest portion and the principal portion for the first payment of the 15 years loan.
9- Make an amortization schedule for the first two payments of the 15 years loan.
This come with more but i only need 5-9 answer
Mary is purchasing a home for 294000$. 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$.
Explanation / Answer
5.
Loan amount = Home price × (1 – Down payment rate)
= $294,000 × (1 – 0.20)
= $294,000 × 0.80
= $235,200
Loan amount = {(Principal & interest)/ (i/12)} × {1 – (1 + i/12)^-(n × 12)}
235,200 = {(Principal & interest) / (0.04/12)} × {1 – (1 + 0.04/12)^-(15 × 12)}
Principal & interest = $1,739.74
Monthly taxes = $2564 / 12 = $213.67
Monthly insurance = $1778 / 12 = $148.17
PITI = Principal & interest + Monthly taxes + Monthly insurance
= $1,739.74 + $213.67 + $148.17
= $2,101.58