Reality Check Mortgages - Mr. Walker

Reality Check ? Mortgages

To complete this assignment you will need to talk to someone who is currently paying a mortgage on their home. You will be calculating how much they have, and will, pay for their home over the course of their loan. You will discuss these details with the home-owner, and then submit answers to the following questions.

How much was the original loan amount for? Did they make a down payment? If so, what percent of the home value did they put down? What is the interest rate on the current loan? Is it a 30 or 15 year mortgage, or something different? What is the monthly mortgage payment? Do they pay extra each month? Why or why not? If they do, how much?

Now use the Dave Ramsey mortgage calculator that we have been using in class. Figure out how much the calculator says they should be paying per month, just for the bank loan. Calculate the difference between the mortgage calculator's estimated monthly payment and their real monthly mortgage payment. Why is there a difference between these two values? What is the person paying for, other than just the home loan?

Mortgage calculator's home loan monthly payment estimate? Real monthly mortgage payment amount? Difference between the two, per month? Things the mortgage payment covers, other than the home loan?

Take the monthly mortgage being paid by the individual, and multiply it by the total number of months that the loan will have been paid off in, when it is paid off in full.

Amount that will be paid in total for the home, including down payment, and full loan amount with interest?

Difference between the original home value listed and the real amount that will be paid in total by time the house is paid off?

Now play around with the mortgage calculator showing how different rates, shorter loan lengths, paying extra each month, a larger down payment, etc. would affect this total amount paid.

Write a few paragraphs about your impressions and the impressions of the individual who you are "interviewing" about their current mortgage and how it could be different.

Sign below that you have honestly completed the assignment to the best of your abilities. Have the individual whom you interviewed sign below that this was honestly done regarding their

mortgage, to the best of their knowledge. Bring this paper, signed below, to Mr. Walker before the end of the Trimester to earn Daily Quiz points

back.

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