URGENT!!!!!!! PLEASE HELP

Chapter 5 Activity Amortization

Use a real estate companys search engine to identify a home you may be interested in buying in the near future.

1. Name of real estate company & web address:

2. Property address:

3. Property price:

To avoid paying private mortgage insurance (PMI), buyers typically need a 20% down payment. Calculate such a down payment for this home.

4. Down payment of 20%:

Find current mortgage rates for the loan types below from a bank of your choice.

5. Source (bank/web address) & terms for 30-year mortgage:

6. Source (bank/web address) & terms for 15-year mortgage:

Find an amortization calculator that is capable of showing you the entire amortization schedule to answer the following questions (www.bankrate.com is usually a good source).

7. What is the monthly payment on the 30-year loan (make sure you deduct your down payment when calculating the loan amount)?

8. How much of the first payment is interest on the 30-year loan?

9. Use the amortization schedule to determine the loan balance of the 30-year loan once half the payments are made.

10. What percent of the original 30-year loan still remains (i.e. remaining principal balance divided by original loan amount)?

11. How much total interest do you pay over the life of the 30-year loan?

12. What is the monthly payment on the 15-year loan?

13. How much of the first payment is interest on the 15-year loan?

14. Use the amortization schedule to determine the loan balance of the 15-year loan once half the payments are made.

15. What percent of the original 15-year loan still remains (i.e. remaining principal balance divided by original loan amount)?

16. How much total interest do you pay over the life of the 15-year loan?

17. On the back of this sheet, discuss your reaction to the above exercises. Questions to consider (DO NOT limit yourself to just these questions; consider them a jumping off point. I just want your reaction!): Does a 30-year or 15-year mortgage seem more financially responsible? Do you think you will be able to save an adequate down payment by the time you want to purchase a home? Are surprised at how much (or little) of the home you actually own halfway through making payments?