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Bus302

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Submitted By mildene
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Running head: BUYING A HOUSE

Buying a House
Mildene Faulkner
MAT 104
Edmund Ford, Jr.
August 7, 2012

Buying a House Five years ago, I bought a house for 151,000, with a down payment of 30,000. I took a loan for 121,000. The interest rate on the house was a fixed 5.75%. I am paying more on my loan, so I can pay it off in 20 years instead of 25. I am currently paying $211.13 in Escrow payments and $706.12 in principal and interest payments. My current loan balance is $112,242.47. I am going to explain how much money I will need to pay off my loan in 20 years instead of 25. I am currently paying $917.25 in monthly payments on my house. I would like to see how much money I would have to add to my monthly payments, if I want to pay off my house in 20 years. By using the monthly payment method and the table provided to me by my realtor, I see that if I take the loan amount and divide it by 1000, and then multiply by the tablet entry of 7.0208, I would get $788.03. Then to figure out the amount of money I need to add to my monthly payment to pay of my loan in 20 years, I have to subtract $706.12, which is my monthly principle and interest from $788.03. That would give a total of $81.91. This is the amount of money I need to add to my current monthly payment in order to pay off my loan in 20 years instead of 25. I think that I would be reasonable to try to pay off the loan in 20 years versus 25 years. I think I can maintain a comfortable lifestyle doing this as long as my other bills are in current standing and I have at least $100 or a little less left over. I know that with doing that I would get my loan paid off early. I would still have extra money coming into the household, because I have a spouse that works. I also have savings account that filled enough to sustain my family for at least a year if one of us happens to go out of work. Having no money

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