Instructions:
Show all work for each section. Any paragraphs should be typed and written in complete sentences. Use
Times New Roman, 12-point font and double space. Cite any resource that you use. (For a guide to cite
resources in APA, click on the following document: APA Formatting Guide.) Include any additional
paperwork with your project document. Please note: up to 10% of the total points could be deducted for
shortcomings in sentence structure and mechanics for written responses.
Part III: Finding Mortgage Payments
In this scenario you cannot pay cash for your home (Refer to your answers in Home Project, Part 2) and
you will need to get a loan from a financial institution. Research and find a current interest rate for both a
30-year fixed mortgage and a 15-year fixed mortgage through your bank or other source such as Bankrate
website.
- Record the interest rate for each loan from the bank of your choosing:
Loan 1: 30-year fixed mortgage:
Loan 2: 15-year fixed mortgage:
Cite your source: __________________ - Suppose you decide to make a down payment of 20% of the purchase price for the 30-year fixed
mortgage and 10% of the purchase price for the 15-year fixed mortgage.
a. Calculate the down payment for your house for the 30-year fixed mortgage. Show all work.
b. How much will you need to finance from the bank for the 30-year fixed mortgage with the 20% down
payment? Show all work.
c. Calculate the down payment for your house for the 15-year fixed mortgage. Show all work.
d. How much will you need to finance from the bank for the 15-year fixed mortgage with the 10% down
payment? Show all work. - Use the TVM Solver on your TI-83/84 calculator to get the monthly payment for each mortgage.
a. Loan 1: (the 30-year fixed mortgage with 20% down payment)
N = ___
I % = __
PV = __
PMT = _
FV = __
P/Y = _
C/Y = _
PMT (set at End)
Monthly payment for Loan 1:
Closing costs can be an unexpected expense when buying a home. These costs can include but are not
limited to underwriting fees, other lender fees, title fees, appraisal fees, etc. Assume the cost of these items
for each loan equals $2700.
Determine the total you could expect to pay at closing for this loan option (i.e. closing costs, down payment,
points (if applicable) and first month’s mortgage).
List the costs. _
b. Loan 2: (the 15-year fixed mortgage with 10% down payment)
N = ____
I % = ___
PV = ___
4/9/2020 Order 315767914
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PMT = _
FV = ___
P/Y = ___
C/Y = ___
PMT (set at End)
Monthly payment for Loan 2:
Using the same $2700 for closing costs mentioned in part a, determine the total you could expect to pay at
closing for this loan option. List the costs. _
Loan 3 scenario: Suppose your bank were offering a special deal where you could put 0% down for a 30-
year fixed loan but the interest rate was 1.5% higher (penalty for putting nothing down) than the interest rate
for the 30-year fixed with 20% down. Calculate the mortgage payment for this scenario.
c. Loan 3: (the 30-year fixed mortgage with 0% down)
N = ____
I % = ___
PV = ___
PMT = _
FV = ___
P/Y = ___
C/Y = ___
PMT (set at End)
Monthly payment for Loan 3:
Using the same $2700 for closing costs mentioned in part a, determine the total you could expect to pay at
closing for this loan option. List the costs. _
Loan 4 scenario: Suppose your bank were offering a lower interest rate for a 15-year fixed loan if you pay 4
points (4% of the loan amount) as part of your closing costs (not rolled into your mortgage amount). You are
still required to put 10% down for a 15-year fixed loan but your interest rate is now 1.0% lower. Calculate
the mortgage payment for this scenario.
d. Loan 4: (the 15-year fixed mortgage with points)
N = ____
I % = ___
PV = ___
PMT = _
FV = ___
4/9/2020 Order 315767914
https://admin.writerbay.com/orders_available?subcom=detailed&id=315767914 4/5
P/Y = ___
C/Y = ___
PMT (set at End)
Monthly payment for Loan 4: _
Using the same $2700 for closing costs mentioned in part a, determine the total you could expect to pay at
closing for this loan option. List the costs. __