1. http://bit.ly/HRiNaV
Unit 8
Which Mortgage is Best?
By Vanessa Libby and
Candy
http://bit.ly/HSWeTt

2. What’s the Benefit?
15 and 30 year mortgages

3. How Much Will it Question
Cost?  Find the total amount of interest paid over the life
of each loan?
You have chosen to buy a
house. The house you want to
 Find the total amount paid (purchase price +
purchase sells for $175,000.
interest) for the house over 15 years and 30
You will put a 10% down
years?
payment towards the
purchase and finance the rest.
 What is the monthly payment for each loan? Run
Now you need to decide how
the mouse over the lines on the graph to get more
to pay for it. Do you want a 15
details about the amounts of interest and principal
year mortgage or a 30 year paid.
mortgage? Compare the two
using a 5% interest rate.  How much do you save if you pay an extra $100
per month starting now? An extra $500? Find this
amount for each load.
http://bit.ly/J1jrOH http://bit.ly/HGXSCM

4. 15 Years

5. 30 Years

6. Total amount of interest paid
$160,000.00
$146,883.32
$140,000.00
$120,000.00
$100,000.00
$80,000.00
$66,695.10 total amount of interest paid
$60,000.00
$40,000.00
$20,000.00
$0.00
15 30

7. Monthly payment for each loan
$1,400.00
$1,245.50
$1,200.00
$1,000.00
$845.49
$800.00
monthly payment for each
$600.00 loan
$400.00
$200.00
$0.00
15 30

8. Total amount paid
$350,000.00
$321,883.32
$300,000.00
$250,000.00 $241,698.10
$200,000.00
Find the total
$150,000.00 amount paid
$100,000.00
$50,000.00
$0.00
15 30

9. Paying $100 Extra
$40,000.00
$35,048.35
$35,000.00
$30,000.00
$25,000.00
$20,000.00
paying $100 extra
$15,000.00
$10,000.00
$7,733.43
$5,000.00
$0.00
15 30

10. Paying $500 Extra
$100,000.00
$90,000.00
$87,921.09
$80,000.00
$70,000.00
$60,000.00
$50,000.00
paying $500 extra
$40,000.00
$26,237.55
$30,000.00
$20,000.00
$10,000.00
$0.00
15 30

11. Aerospace Engineer
A n n u a l S a l a r y : $190,170
M o n t h l y I n c o m e : $15,847
15 y e a r 30 y e a r
mo r t g a g e mo r t g a g e
Mo r t g a g e 1245.5/15,847 845.49/15,847
=7.86% =5.34%
p a y me n t
e x p e n s e
t o
e f f e c t i v
e i n c o me
To t a l (1245.5+1,329.67)/15, (845.49+1329.67)/15,84
847 7
f i x e d =16.25% =13.73%
p a y me n t
t o

12. Can You Afford the Monthly Payment for A 15
Year Mortgage?
A 30 Year Mortgage?
Y e s , I c a n a f f o r d b o t h 15 y e a r
a n d 30 y e a r mo r t g a g e . F o r 15
y e a r mo r t g a g e , mo r t g a g e
p a y me n t e x p e n s e t o e f f e c t i v e
i n c o me a n d t o t a l f i x e d
p a y me n t t o e f f e c t i v e

13. If I Am Not Qualify for the Loans,
I Could…
• Part time job ( to increase my income)
• Look for a cheaper house
• If I am not able to afford 15 year
mortgage, 30 year mortgage is a good
choice.

14. I f Yo u Ha v e t h e Ch o i c e ,
Wh i c h O n e i s B e t t e r ?
If I have the choice, I will choose 15 year mortgage without
doubting. I don’t want to pay that much intersect, if I have
the ability to afford 15 year mortgage.

15. I s I t Be t t e r t o
T a k e O u t A 15 o r 30
Y e a r Mo r t g a g e ?
If I can afford 15 year mortgage, I will
defiantly choose 15 year mortgage instead of
30 year mortgage. Because I would pay much
less interest, and I can finish paying my loan
much faster. But if I choose 30 year
mortgage, I have to pay more interest, and
finish paying later, which means I have this
pressure for a longer period of time.