Amortization Tables - Michelle Laskowski | Library

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Suppose someone purchases a 425,000 home and gives a 40,000 down payment. Due to their credit score, they have 4.25% interest rate and choses a 30 year loan and make 12 payments a year. How many months will this loan take to pay off?

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How much equity will this person have built after 1.5 years?

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How many mortgage payments will it take for the person to pay more on the principal than interest?

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How much interest will this person ultimetly pay if they pay off the full 360 months?

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Suppose someone purchases a 425,000 home and gives a 40,000 down payment. This buyer is going to take a 20 year loan which gives them a 3.5% interest rate and make 12 payments a year. How many months will this loan take to pay off?

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How much money will have been paid to the principal after 1.5 years??

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How much equity will this person have built after 1.5 years?

Why is equity important?

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How much total interest was paid? (This is over the length of the loan) ((AKA after all 240 payments)

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How much money was ultimetly saved by taking a 20 year loan which also comes with a lower interest rate?

One last note:
Many times a first time home buyer will only be given a 30 year loan even if they ask for a 20 year loan due to reasons the loan provider may or may not provide.

BUT THATS OK.  

Don't feel that you are stuck.  Just like a car loan, you can apply extra money to the principal whenever you want and that will decrease your overall interest and length of loan.

(I actually like this option because I overpay when I have extra money and don't overpay when I don't)