So let's play around with how these different factors can affect a mortgage. Go to realtor.com...
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So let's play around with how these different factors can affect a mortgage. Go to realtor.com or Zillow.com and find a house for sale that you would like to buy. It can be anywhere in the U.S. and it can be a dream home or a realistic home. 1. Write down the address and the asking price here. $494,000 46 Palmer Rd. Unit 8 Monson, Ma 01057 2. Go to the website of a local bank and find the current interest rates for each of the following types of mortgages 15 year fixed 30 year fixed 5/1 30 year variable rate (fixed for 5 years then changes each year after that) rate rate 10/1 30 year variable rate (fixed for 10 years then changes each year after that) Because the variable rate is impossible to predict after the fixed portion of the loan, we are going 6y to play around with the fixed rate loans. Remember in a variable rate loan, the rate could go up or down depending on the interest rates of the future and there is no way to predict the future. Let's see how the other factors affect your payments and the amount of interest you end up paying. 3. Use this spreadsheet https://docs.google.com/spreadsheets/d/1AfKhduLjPKM3zaWTSL--49wr5bj10Jho3JDr4hP pX90/edit?usp=sharing and this online calculator https://www.hsh.com/calc-pmi.html In row 8 you will need to input the asking price of your desired home, the interest rate of the 15 year fixed mortgage and the interest rate for the 30 year fixed mortgage. Price of Home 494,000 494,000 Down Payment Percent Loan Amount Loan Term Interest Rate Debt to Income Ratio Credit Score Total Monthly Payment H 10 444,600.00 15 6.29% >45% 720 10 444,600.00 15 6.29% <45% 720 494,000 494,000 10 444,600.00 30 7.03% >45% 720 10 444,600.00 30 7.03% <45% 720 EXPLORING LENGTH OF LOAN (LOAN TERM) Price of Home Down Payment Percent Loan Amount 494,000 494,000 10 10 Loan Term Interest Rate Debt to Income Ratio Credit Score Total Monthly Payment H 444,600.00 444,600.00 15 6% <45 720 30 7% <45 720 EXPLORING INTEREST RATES Price of Home Down Payment Percent Loan Amount Loan Term Interest Rate Debt to Income Ratio Credit Score Total Monthly Payment H 494,000 10 444,600.00 15 5.29% <45 720 494,000 10 444,600.00 15 5.79% <45 720 494,000 10 444,600.00 15 6.29% <45 720 494,000 10 444,600.00 15 494,000 10 444,600.00 15 55 6.79% <45 720 7.29% <45 720 494,000 10 444,600.00 30 6.03% <45 720 494,000 10 444,600.00 30 6.53% <45 720 494,000 10 444,600.00 30 7.03% <45 720 494,000 10 444,600.00 30 7.53% <45 720 494,000 10 444,600.00 30 8.03% <45 720 Yellow boxes you pick the input (make sure they make sense for the calculator) Green boxes you record the output from the online calculator White boxes will stay blank or will automatically fill in when you fill in the turquoise, green boxes. You are going to use this online calculator 32 times for 32 different scenarios. Yep, 3 little tedious, but hopefully not difficult. Note: every bank has their own rules when it comes to loans. This is just one repres example. Some banks will not give loans for all the scenarios we are exploring. 4. Once you are done filling in the spreadsheet, share the sheet with me. 5. Find the error in the spreadsheet. Where does the output not quite make sense? 103 6. Write down 10 things you notice about these results on the spreadsheet. So let's play around with how these different factors can affect a mortgage. Go to realtor.com or Zillow.com and find a house for sale that you would like to buy. It can be anywhere in the U.S. and it can be a dream home or a realistic home. 1. Write down the address and the asking price here. $494,000 46 Palmer Rd. Unit 8 Monson, Ma 01057 2. Go to the website of a local bank and find the current interest rates for each of the following types of mortgages 15 year fixed 30 year fixed 5/1 30 year variable rate (fixed for 5 years then changes each year after that) rate rate 10/1 30 year variable rate (fixed for 10 years then changes each year after that) Because the variable rate is impossible to predict after the fixed portion of the loan, we are going 6y to play around with the fixed rate loans. Remember in a variable rate loan, the rate could go up or down depending on the interest rates of the future and there is no way to predict the future. Let's see how the other factors affect your payments and the amount of interest you end up paying. 3. Use this spreadsheet https://docs.google.com/spreadsheets/d/1AfKhduLjPKM3zaWTSL--49wr5bj10Jho3JDr4hP pX90/edit?usp=sharing and this online calculator https://www.hsh.com/calc-pmi.html In row 8 you will need to input the asking price of your desired home, the interest rate of the 15 year fixed mortgage and the interest rate for the 30 year fixed mortgage. Price of Home 494,000 494,000 Down Payment Percent Loan Amount Loan Term Interest Rate Debt to Income Ratio Credit Score Total Monthly Payment H 10 444,600.00 15 6.29% >45% 720 10 444,600.00 15 6.29% <45% 720 494,000 494,000 10 444,600.00 30 7.03% >45% 720 10 444,600.00 30 7.03% <45% 720 EXPLORING LENGTH OF LOAN (LOAN TERM) Price of Home Down Payment Percent Loan Amount 494,000 494,000 10 10 Loan Term Interest Rate Debt to Income Ratio Credit Score Total Monthly Payment H 444,600.00 444,600.00 15 6% <45 720 30 7% <45 720 EXPLORING INTEREST RATES Price of Home Down Payment Percent Loan Amount Loan Term Interest Rate Debt to Income Ratio Credit Score Total Monthly Payment H 494,000 10 444,600.00 15 5.29% <45 720 494,000 10 444,600.00 15 5.79% <45 720 494,000 10 444,600.00 15 6.29% <45 720 494,000 10 444,600.00 15 494,000 10 444,600.00 15 55 6.79% <45 720 7.29% <45 720 494,000 10 444,600.00 30 6.03% <45 720 494,000 10 444,600.00 30 6.53% <45 720 494,000 10 444,600.00 30 7.03% <45 720 494,000 10 444,600.00 30 7.53% <45 720 494,000 10 444,600.00 30 8.03% <45 720 Yellow boxes you pick the input (make sure they make sense for the calculator) Green boxes you record the output from the online calculator White boxes will stay blank or will automatically fill in when you fill in the turquoise, green boxes. You are going to use this online calculator 32 times for 32 different scenarios. Yep, 3 little tedious, but hopefully not difficult. Note: every bank has their own rules when it comes to loans. This is just one repres example. Some banks will not give loans for all the scenarios we are exploring. 4. Once you are done filling in the spreadsheet, share the sheet with me. 5. Find the error in the spreadsheet. Where does the output not quite make sense? 103 6. Write down 10 things you notice about these results on the spreadsheet.
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