The individuals in the following scenarios are currently independent adults, looking to buy a home. Each of them, fortunately, took a personal finance class in high school and learned the value of doing some preliminary work on a mortgage calculator before determining their price range. Use the Bankrate. com Mortgage Calculator for this activity. TREMAINE:

Wants a one-bedroom townhouse in a trendy new development downtown; average cost is $145,000
Is preapproved for a 4.38% interest rate on a 30-year fixed mortgage
Has saved $15,000 for a down payment

1. What will Tremaine’s monthly payment be?
2. How much total interest will he pay over the course of the mortgage?
3. If Tremaine waited until he had $30,000 saved for a down payment,

What will his monthly payment be?
How much total interest will he pay over the course of the mortgage?
How much money did he save by paying an extra $15,000 upfront?

CARLIN:

Has been renting a two-bedroom apartment with her husband and 3 kids; wants to move into a three bedroom home instead
Took her five years, but she has saved $20,000 for a down payment
Homes in her small town are typically selling for $75,000 to $95,000
Is preapproved for a 3.89% interest rate on a 30-year fixed mortgage
Needs her monthly payment to be less than $400

4. Rounded to the nearest $500, what is the most expensive house Carlin could buy?
5. How much total interest will she pay over the course of the mortgage for this house?
6. What month and year does Carlin pay off her house?
7. If Carlin could add just $50 to each monthly payment, how much money would she save on interest?
8. What month and year does Carlin pay off her house if she makes the higher monthly payment?
9. What are some strategies Carlin could use to make sure she has an extra $50/month for her mortgage?
10. If Carlin can afford $450 per month, she could have just bought a more expensive house. Do you think she should pay off an expensive house in 30 years? Or should she pay off a cheaper house in less time with less interest? Explain why you feel that way.

BRYCE:

Has a high paying job and has determined he could afford up to $2800 per month
Wants a sweet home to reward all his hard work; his dream home costs $550,000
Has been sloppy in the past with his bill pay, leading to a credit score of 650, so the best rate he can get is 4.69% for 30 years fixed
Is willing to contribute $75,000 to his down payment

11. How much, per month, is Bryce short on the mortgage payments for his dream home?
12. How much would Bryce’s down payment need to be if he wanted to get his monthly payments down to $2,500 or slightly under?

Required:
Using this strategy, how much total interest would he pay over the course of the loan?