Question

Marisa wants to buy a home in Atlanta with a 30-year mortgage that has an annual interest rate of 4.9% The house she wants is $250,000 and she will make a $55,000 down payment and borrow the remainder.

a. What is Marisa's monthly mortgage payment to the nearest dollar?
b. How much will the house cost in total after all payments have been made, also include the down payment.
c. How much did Marisa have to spend in interest to borrow this loan?​

Answer 1

a. Using a mortgage calculator with the given information, Marisa's monthly mortgage payment would be $1,088 to the nearest dollar.

b. The total cost of the house, including the down payment and all payments made over the 30-year mortgage period, would be $453,020. This is calculated by adding the $55,000 down payment to the total amount borrowed ($195,000) and then adding the total interest paid over the 30 years ($203,020) to get $453,020.

c. Marisa will have spent $203,020 in interest over the 30-year mortgage period. This is calculated by subtracting the total amount of the loan ($195,000) from the total amount paid over the 30 years ($398,020), which leaves $203,020 in interest paid.