MATH 114 DB FORUM 1
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114
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Mathematics
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Apr 3, 2024
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Uploaded by MinisterRockMagpie32
MATH 114 FORUM 1
THREAD
Using the information and data obtained from the questions asked on the topic of mortgages, I will attempt to explain the differences and the advantages of both mortgages. I will also opine which is the better of the two.
At first glance there are two things that might jump out when comparing the two mortgages. The first thing that is probably noticed is the overall cost differences between the two homes. The second thing noticed will mostly be the amount of interest that is to be paid over the duration
of the loans. There is a difference of $119,953.91 between a 15-year mortgage and the 30-year mortgage. For this assignment, the price difference of the two homes is based on the maximum monthly payment. There are other factors that must be taken into consideration before committing to the loan besides the overall cost of the homes and the amount of interest paid over the duration of the
loans. The things that can contribute to the cost of a home and should be considered are but are not limited to; the number of bedrooms, the number of bathrooms, square footage, the floorplan of a two-story or ranch style home or the location of the home (waterfront, city, suburb or country). If one would compare two homes based on equal price you would find that a two-story
home will typically have more square footage than a ranch style. A home in the country is larger
than one in the city and a home in the suburbs is different than what is found near the water. Though a 15-year mortgage means you will own your home sooner in comparison to the 30-
year mortgage, you will often have less square footage, fewer bedroom and bathrooms and you might have to sacrifice a few other features like the pool or bonus room. The advantage of a 30-
year loan is that you can have more of the options and you could actually “grow into a home” if you buy a larger home before having children. Another advantage of the 30-year loan is that you
can make additional payments over the duration of the loan. This can be done by setting up a scheduled payment every two weeks vice once a month that equates to an extra payment a year. Another option is to use your income tax return to make an additional payment or to use a combination of savings and income tax returns to make the extra payment. Either way could result in a 30-year mortgage being reduced to a 25-year mortgage because of the extra payment. In my opinion, I like the 30-year mortgage as it affords a lower monthly payment. Though there is more interest involved in the 30-year loan this can be offset by making additional payments over the term of the loan. The higher price point will usually have more options and features than that of a lower priced home. In the end, it is the decision of the individual(s) and hopefully all things have been taken into consideration before entering into a long-term financial commitment of home ownership.
Proverbs 22:7 makes a very clear statement that the one who borrows is enslaved to the lender. This statement is true to the sense that the borrower is working for the lender to pay what is owed. I do not interpret this passage that I am a slave to the extent that I have become the property of the lender. I would go as far as saying that the loan does not automatically put a borrower into a position to they are forced to obey. Romans 13:7 states, “Pay to all what is owed
to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed.”
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In my opinion, this is a good rule to live by. In closing, I will add something to think about and if an answer is known please share. At what point in time did money borrowed become taxed? 1
Bible: Romans 13:7 ESV
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