Question

A house is being purchased with a 20% down payment and a 30 year loan at an interest rate of 9.25%. What are the monthly payment and total financed price of a home that is sold for $ 568,000?

B. What would happen if the loan were over 15 years?

C. What are the total financed ratios?

Answer 1

A)
568,000.00
113,600.00 (20% down payment)

454,400.00 (amount of mortgage)
at 9.25% for 30 years (360 months)
rate = rate / 1,200 = 0.0077083333
Monthly Payment = [0.0077083333 + 0.0077083333 / (1.0077083333)^360 -1] * 454,400.00

Monthly Payment = [0.0077083333 + (0.0077083333 / 15.8688698943 -1)] * 454,400.00

Monthly Payment = [0.0077083333 + (0.0077083333 / 14.8688698943)] * 454,400.00

Monthly Payment = [0.0077083333 + ( 0.0005184209 )] * 454,400.00

Monthly Payment = 0.0082267542 * 454,400.00

Monthly Payment = 3,738.24

B) For fifteen years, calculate this equation
Monthly Payment = [0.0077083333 + 0.0077083333 / (1.0077083333)^360 -1] * 454,400.00
Substituting 180 months for 360 months.