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GROUP 4 Part 3

GROUP 4 Part 3. Lauren Kate Torres and Susanna Keyes. Lauren’s Info. Career/Major: Paralegal Salary: $45,000 Location: Henderson, NV Price: $155,000 Listing Type: House Other: Pool, 3 car garage Monthly payment: 30 year - $656.35 15 year - $955.34 30 to 15 year savings:

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GROUP 4 Part 3

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  1. GROUP 4 Part 3 Lauren Kate Torres and Susanna Keyes

  2. Lauren’s Info Career/Major: Paralegal Salary: $45,000 Location: Henderson, NV Price: $155,000 Listing Type: House Other: Pool, 3 car garage Monthly payment: 30 year - $656.35 15 year - $955.34 30 to 15 year savings: $55,985.78 Additional Savings with extra $100 on 15 year: $21,999.34

  3. Susanna’s Info Major: Statistical Math Career: Actuarial Science Location: Downtown SLC Price: $179,966 Listing Type: Condo Monthly payment: 30 year - $822.03 15 year - $1180.85 30 to 15 year savings: $83,539.15 Additional Savings with extra $100 on 15 year: $23,617.00

  4. Mortgage Payment Calculation PMT = ___P(r/12)____ 1-(1+r/12)^-12Y • P = mortgage amount • r = annual interest rate in decimal • Y = number of years to payoff loan

  5. Total Interest Comparison

  6. Total paid by payment type Lauren’s payment comparison Susanna’s payment comparison

  7. Comparison 30 Year Loan Pros 30 Year Loan Cons • Gives a lower monthly payment. • Allows you and your family extra money for other priorities per month. • Paying almost double for your home in interest. • It will take around 150 payments to start having more money put towards the principle of the home rather than interest

  8. Comparison 15 Year Loan Pros 15 Year Loan Cons • Pay off your home quickly giving you the ability to own your home. • Pay less interest, first payment has more going towards the principle. • Pay less for the home overall. • Higher monthly payment. • Not a lot of extra money for emergencies or other priorities.

  9. Results • Our group came to an agreement with this assignment. In the long run, a 30 year loan is worse compared to the 15 year loan. • You will be saving money on a monthly basis with a 30 year loan, but as time goes by, you are actually spending much more money due to the interest paid on a 30 year loan.

  10. Conclusion • From doing this assignment it has changed Lauren’s thoughts about buying a house. She would rather get a 15 year loan and pay the extra $100 a month to pay the home off in a little over 12 years. • She feels this is the best option and would rather make more payments towards the principle of the home rather than the interest. • Susanna would rather buy a condo if buying at all. She prefers being in an urban environment and also does not mind renting. • If she bought a condo, she would definitely go for the 15 year loan when looking at how much of a savings in interest there is over the life of the loan.

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