A star of a reality TV show: Real Housewives of Tacoma bought a house for her family
A star of a reality TV show: Real Housewives of Tacoma bought a house for her family 3 years ago. The house’s asking price was $895,000. She put 20% down payment and a local bank lent her the remaining at a 3.6% fixed APR for 30 years, with monthly payment for the mortgage. In the last 3 years, she has made all the monthly payment on time.
a) How much is her monthly payment?
b) What is her outstanding loan balance now?
c) Her network just renewed her contract for another year. She received a bonus of $50,000 that she plans to use to reduce her mortgage balance. What is her new loan balance after the $50,000 payment?
d.1) After the balance reduction, if she plans to continue to pay the loan off in 27 years and the APR remains at 3.6%, what is her new monthly payment?
d.2) After the balance reduction, if she plans to continue plan to make the same monthly payment as before (the number you calculated in part a)), how many months are left before she is debt-free?