Buying a House with a Mortgage

• Price of the house
• Percentage down
• Down payment.
• Amount financed.
• Table 11.4, page 696
  • Using the terms of the loan, find the $/$1000
  • Multiply this by the number of $1000 to get monthly payment
• Points
  • Each point is 1% of the amount financed.
• Examples: #12

• Purchase Price 289,000
  Percent Down   10%
  Down Payment   28,900
  Loan Amount = 289,000-28,900 =  260,100
  If they had to pay 3.25 points: 260,100x.0325 = 8,453.25
  Period: 30 years
  Rate: 8%
  Payment per $1000: $7.34
  Number of $1000: 260.1
  Monthly Payment: 7.34 x 260.1 = $1,909.13
  
  Total Amount paid for the house: 
       $1,1909.13 x 30 x 12 = 687,288.24
  Amount of interest paid
      687,288.24-260,100 = 423,188.24
  
  The first payment:
     i = prt
     i = 260,100 * .08/12 * 1 = 1,734
  Principle on the first payment
     1,909.13-1,734 = 175.13
  Amount remaining
     260,100 - 175.13 = 2599,924.87
      

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