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Math Housing Project

Math Housing Project . April 23, 2012 Yulia Danilova Math 1050 Amber Rector Logan Barmore Joleen Widmark Eli Wire. Future Career: Social work Location: Marana, Arizona Average Salary: $40,000/year Amount of Home I can afford: $110,000 Amount of Home Purchasing: $99,900

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Math Housing Project

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  1. Math Housing Project April 23, 2012 Yulia Danilova Math 1050 • Amber Rector • Logan Barmore • JoleenWidmark • Eli Wire

  2. Future Career: Social work Location: Marana, Arizona Average Salary: $40,000/year Amount of Home I can afford: $110,000 Amount of Home Purchasing: $99,900 Interest Rates: 30 Year-3.55% 15 Year-2.73% Amber’s Project Part 1 Citations: http://www.tucsonhomeshopping.com/printable.aspx?listingid=24760524 http://zillow.com/mortgage-calculator/house-affordability/ http://www.mlcalc.com/mortgage-rates/arizona/

  3. Amber’s Project Part 2 • House Cost $99,900 • Down Payment $9,990 • Mortgage Amount $89,910 30 Year Interest Rate 3.55% Monthly Payment $406.23 Total Interest Paid $56,340 Total Repayment amount $146,250 127th Payment the Principal amount will be more than interest amount 15 Year Interest Rate 2.73% Monthly Payment $609.29 Total Interest Paid $19,762.20 Total Repayment amount $109,672 1st Payment the Principal amount will be more than interest amount PMT=_͟_P(r/12)___ P=mortgage amount, r=annual interest rate in % 1-(1+r/12)-12Y Y=number of years to pay off the loan

  4. Amber’s Project Conclusions • For a young couple, renting might be a better option in the beginning, to pay off debt and save money for a higher down payment. • If a couple can afford the higher payment or to make extra payments, a 15 year loan would be a better option. • When my Husband and I purchase our next home we will do some extra research on mortgage rates, and use that information to better plan what our possible mortgage payments can and will be.

  5. Future Career: Philanthropy Solutions • Average Salary: $50,000/year • Amount of Home I can afford: $187,000 • (Side note: Just because the bank says I can afford that amount, I would not feel comfortable with that much debt) • Listing Price of Home: $100,000 • Interest Rates: 30 Year-3.625% 15 Year-3.00% Joleen’s Project Part 1 Citations: http://www.realtor.com/realestateandhomes-detail/3503-Kauffman-Ave_Vancouver_WA_98660_M29508-81358 http://jobs.cof.org/jobseeker/search/results/http://www.smallfoundations.org/connections/

  6. Joleen’s Project Part 2 House Cost: $100000.00 Down payment: $10,000.00 Mortgage Amount: $90,000.00 30 Year Interest Rate 3.625% Monthly Payment $410.25 Total Interest Paid $57,760.62 Total Repayment amount $147,760 228th Payment the Principal amount will be more than interest amount 15 Year Interest Rate 3.00% Monthly Payment $621.52 Total Interest Paid $21,874 Total Repayment amount $110,874 1st Payment the Principal amount will be more than interest amount PMT=_͟_P(r/12)___ P=mortgage amount, r=annual interest rate in % 1-(1+r/12)-12Y Y=number of years to pay off the loan

  7. Joleen’s Project Conclusions • It’s important to learn that while the bank states you can afford a certain amount, you need to look at your own budget and see what you are comfortable with • When interest is calculated in a 30 year mortgage, it takes years to start making a dent in the debt owed on a mortgage. • Taking any extra cash and applying it to a mortgage will reduce the time and interest considerably. Paying off your mortgage as quickly as possible will save a family thousands of dollars and provide a peace of mind when they own it outright. (I own one home that doesn’t hold a mortgage and brings in a monthly income.)

  8. Eli’s Project Part 2 • Future career: Histotechnician • Location: 84120 • Average salary: $40,000/year plus benefits and $8,000 tuition to further my education. • Amount of home I can afford: $135,619.00 • List price of home: $119,000.00 • Interest rates: 3.5% for both 30 and 15 year loans Citations: https://www.americafirst.com/personal/loan-products/home-loans/ http://www.realtor.com/realestateandhomes-detail/5108-W-3000-S_West-Valley-City_UT_84120_M19758-04949.

  9. Eli’s Project Part 2 • House Cost $119,000.00 •  Down Payment $11,900.00 • Mortgage Amount $107,910.00 • 30 Year Interest Rate 3.5% • Monthly Payment $484.25 • Total Interest Paid $66,533.08 • Total Repayment amount $147,760.00 • 124th Payment the Principal amount will be more than interest amount • 15 Year Interest Rate 3.5% • Monthly Payment $770.76 • Total Interest Paid $25,249.82 • Total Repayment amount $110,874.00 • 1st Payment the Principal amount will be more than interest amount PMT=_͟_P(r/12)___ P=mortgage amount, r=annual interest rate in % 1-(1+r/12)-12Y Y=number of years to pay off the loan

  10. Eli’s Project Conclusions Going into this semester, I thought I’d own a house before summer started, so I was surprised to see that this assigned project coincided so wonderfully with such a big step in my life – what a great opportunity for preparation!   Personally I do not think renting is a good option, because my rent is more expensive per month than owning a home by several hundred dollars a month. Also, I live in a very small apartment for the same price as buying a generously sized home. Finally, in real life I have a larger down payment than calculated for this assignment, so I feel comfortable purchasing – a larger down payment lowers the overall cost of the home and reduces monthly payments. Of course, there are also things to consider, such as the upkeep of the home being more costly than the total payment of a rental. I considered everything in order to determine if I was financially ready to purchase a home. When I met with my lender and realtor they were both very surprised that I knew what my expenses would be, so I explained that we were learning how to calculate house payments and down payments in math class.   I loved learning about amortization rates.  I loved learning about paying on the interest v. paying down the principle. However, I came to the conclusion that I am not emotionally ready to purchase a home, and withdrew an offer I had recently made in a home in Ogden.  Since I am not originally from Utah, I realized I’d like to buy a home in my home state of Indiana after I graduate here, but because of this project, I feel more confident that when it is time for me to buy a home, I can calculate exactly how much money I should expect to spend.   When doing the calculations, I wish this project could have been slightly more life like.  For example, we calculated what we would pay for shorter and longer terms (15 and 30 years, respectively) but we didn’t calculate the money we’d save by making twice monthly payments rather than one monthly payment.  I had read about that online and done the calculations myself, only to find out from my lender that I’d most likely be stuck with a fee if I chose to do this.  I also wish this project would have reflected on the new (as of April 1, 2013) law that requires mortgage insurance on loans that have <20% down payment on conventional loans. In other words, if 20% instead of 10% is put down on a home loan, mortgage insurance can be avoided on a conventional loan. On the other hand, if going with an FHA, mortgage insurance is required until the home owner refinances with a conventional loan.

  11. Logan’s Project Part 1 Citations: http://www.payscale.com/wizards/ue/q.aspx?mq=y&wizardid=7&levelid=20&pid=43ba4fd2-a9d5-4eba-92a0-db266ecc4fb4&fgid=294&fgid=297&fgid=334&next=/wizards/ue/default.asp?wizardid=7&pid=43ba4fd2-a9d5-4eba-92a0-db266ecc4fb4http://m.realtor.com/intercept/?returnUrl=http://m.realtor.com/#details?property_id=7656774182http://www.zillow.com/mortgage-rates/30-year-fixed/ • Future Career: Physicist • Location: Batavia, IL • Average Salary: $75,000/year • Amount of Home I can afford: $225,274 • Amount of Home Purchasing: $219,900 • Interest Rates: 30 Year/15 Year-3.384%

  12. Logan’s Project PART 2 • Housing Cost: $219,900.00 • Down Payment: $21.990.00 • Mortgage Amount: $197,910.00 • 30 Year Interest Rate 3.384% • Monthly Payment $875.94 • Total Interest Paid $117,427.99 • Total Repayment amount $337,327.99 • 244th Payment the Principal amount will be more than interest amount • 15 Year Interest Rate 3.384% • Monthly Payment $1403.58 • Total Interest Paid $54,733.86 • Total Repayment amount $274,633.86 • 1st Payment the Principal amount will be more than interest amount PMT=_͟_P(r/12)___ P=mortgage amount, r=annual interest rate in % 1-(1+r/12)-12Y Y=number of years to pay off the loan

  13. Logan’s Project PART 2 • It was nice to do some basic research of homes in Europe. • Like all loans the sooner you can pay it off the better. However it was nice to be aware of the early pay off fee. • Buying a home is far off for me and thus most rates and regulations could change making it easier or harder.

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