Mortgage, part 1 (The Loan) 5 years ago you purchased a home for $215,000. You made a 10% down payment and paid for the rest with a 30 year mortgage with a rate of 4.65%. How much was the down payment? How much of the purchase price did you finance with the loan? What is your monthly payment? Use solver. Clearly write the formula you will use as well as all values used in the formula. How much of the loan is left to pay after the first 5 years? Use solver. Clearly write the formula you will use as well as all values used in the formula. How much did you pay to the lender (total) over the first 5 years? How much of what you paid to the lender in the first 5 years was interest? If you paid this loan for all 30 years, how much interest would you pay? Mortgage, Part 2 (Amortization Schedule) An amortization schedule is a table detailing each periodic payment on an amortizing loan, as generated by an amortization calculator. Amortization refers to the process of paying off a debt over time through regular payments. Use an online amortization calculator and have it create a monthly amortization schedule for the loan in “Mortgage, Part 1.” Choose a month from years 1, 7, 15, and 25 and record the numbers from the amortization schedule below. Make sure to label what the columns represent. Explain why the amount of interest paid each month is different when the interest rate is always 4.65%. Using the amortization schedule, find the year and month in which the ending balance is closest to half the loan amount (the time at which half of the loan has been paid off). Record the numbers from the amortization schedule below. Use your calculator solver to determine when half of the loan has been paid off. Show your numbers below. Clearly explain how your calculator gives the same answer as the amortization schedule. Mortgage, Part 3 (Refinancing) Now interest rates have dropped to 2.875%, so you decide to refinance your loan. Search for what it means to refinance a loan. Write 1-2 sentences here explaining what it means to refinance a loan. Using the amount you still owe on the house (from question 3d), what is your new monthly payment. (The new loan has a rate of 2.875% and will be for 30 years). How much less is this than the original monthly payment (question 2c)? To complete the refinance, you needed to pay $2,500 in closing costs out of pocket (cash). How many months will it take you to recover this cost from the money you are saving with your new monthly payment? If you paid this (new) loan for all 30 years, how much interest would you pay? Considering all of the information you’ve found so far how long do you need to stay in this house under the refinance to make the refinancing worth completing? How did you decide?

Mortgage, part 1 (The Loan) 5 years ago you purchased a home for $215,000. You made a 10% down payment and paid for the rest with a 30 year mortgage with a rate of 4.65%. How much was the down payment? How much of the purchase price did you finance with the loan? What is your monthly payment? Use solver. Clearly write the formula you will use as well as all values used in the formula. How much of the loan is left to pay after the first 5 years? Use solver. Clearly write the formula you will use as well as all values used in the formula. How much did you pay to the lender (total) over the first 5 years? How much of what you paid to the lender in the first 5 years was interest? If you paid this loan for all 30 years, how much interest would you pay? Mortgage, Part 2 (Amortization Schedule) An amortization schedule is a table detailing each periodic payment on an amortizing loan, as generated by an amortization calculator. Amortization refers to the process of paying off a debt over time through regular payments. Use an online amortization calculator and have it create a monthly amortization schedule for the loan in “Mortgage, Part 1.” Choose a month from years 1, 7, 15, and 25 and record the numbers from the amortization schedule below. Make sure to label what the columns represent. Explain why the amount of interest paid each month is different when the interest rate is always 4.65%. Using the amortization schedule, find the year and month in which the ending balance is closest to half the loan amount (the time at which half of the loan has been paid off). Record the numbers from the amortization schedule below. Use your calculator solver to determine when half of the loan has been paid off. Show your numbers below. Clearly explain how your calculator gives the same answer as the amortization schedule. Mortgage, Part 3 (Refinancing) Now interest rates have dropped to 2.875%, so you decide to refinance your loan. Search for what it means to refinance a loan. Write 1-2 sentences here explaining what it means to refinance a loan. Using the amount you still owe on the house (from question 3d), what is your new monthly payment. (The new loan has a rate of 2.875% and will be for 30 years). How much less is this than the original monthly payment (question 2c)? To complete the refinance, you needed to pay $2,500 in closing costs out of pocket (cash). How many months will it take you to recover this cost from the money you are saving with your new monthly payment? If you paid this (new) loan for all 30 years, how much interest would you pay? Considering all of the information you’ve found so far how long do you need to stay in this house under the refinance to make the refinancing worth completing? How did you decide?

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Mortgage, part 1 (The Loan)
5 years ago you purchased a home for $215,000. You made a 10% down payment and paid for the rest with a 30 year mortgage with a rate of 4.65%.
1. How much was the down payment?
2. How much of the purchase price did you finance with the loan?
3. What is your monthly payment? Use solver. Clearly write the formula you will use as well as all values used in the formula.
4. How much of the loan is left to pay after the first 5 years? Use solver. Clearly write the formula you will use as well as all values used in the formula.
5. How much did you pay to the lender (total) over the first 5 years?
6. How much of what you paid to the lender in the first 5 years was interest?
7. If you paid this loan for all 30 years, how much interest would you pay?
Mortgage, Part 2 (Amortization Schedule)
An amortization schedule is a table detailing each periodic payment on an amortizing loan, as generated by an amortization calculator. Amortization refers to the process of paying off a debt over time through regular payments.
Use an online amortization calculator and have it create a monthly amortization schedule for the loan in “Mortgage, Part 1.”
1. Choose a month from years 1, 7, 15, and 25 and record the numbers from the amortization schedule below. Make sure to label what the columns represent. Explain why the amount of interest paid each month is different when the interest rate is always 4.65%.
2. Using the amortization schedule, find the year and month in which the ending balance is closest to half the loan amount (the time at which half of the loan has been paid off). Record the numbers from the amortization schedule below.
3. Use your calculator solver to determine when half of the loan has been paid off. Show your numbers below.
4. Clearly explain how your calculator gives the same answer as the amortization schedule.

Mortgage, Part 3 (Refinancing)
Now interest rates have dropped to 2.875%, so you decide to refinance your loan.
Search for what it means to refinance a loan. Write 1-2 sentences here explaining what it means to refinance a loan.
Using the amount you still owe on the house (from question 3d), what is your new monthly payment. (The new loan has a rate of 2.875% and will be for 30 years). How much less is this than the original monthly payment (question 2c)?
To complete the refinance, you needed to pay $2,500 in closing costs out of pocket (cash). How many months will it take you to recover this cost from the money you are saving with your new monthly payment?
If you paid this (new) loan for all 30 years, how much interest would you pay?
Considering all of the information you’ve found so far how long do you need to stay in this house under the refinance to make the refinancing worth completing? How did you decide?

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