Find a home that is for sale in your area (purchase price must be at least $20,000). The house that I found costs $279,900
- You will finance 80% of the purchase price. Using 5% as the interest on your 30-year fixed rate mortgage, calculate the monthly payment using the factor table from the textbook.
- Calculate the payment using the same 5%, but for a 15-year mortgage.
- Real estate taxes amount to 1% of the sales price and the insurance premium is .5% of the sales price per year. Calculate the total monthly PITI payment.
- Present your findings to your classmates and explain how much interest you would save over the life of the loan if you used the 15-year versus the 30-year loan. Show your calculations.