Answer on Excel spreadsheets. Scenario #3

Mortgage Analysis You will be given five scenarios to complete. For each scenario, calculate the total interest that you will have paid once the mortgage is paid off. There is not a function for this, so you will have to enter the formula into the cell. Also, for each scenario calculate the total cost of the home purchase for cach scenario (down payment plus principal [loan amount] plus interest.) Base scenario data: You are planning to purchase a house that costs 480,000. You plan to put 20% down and borrow the remainder. Based on your credit score, you believe that you will pay 3.99% on a 30-year mortgage 1.Base scenario ( Use function "PMT" to calculate your mortgage 2. Scenario#2: Use function .'PV" to calculate the loan amount given a 3. Scenario#3: Use function"RATE" to calculate the interest rate given 4. Scenario #4: Assume that you plan to pay an extra $300 per month on payment. payment of $1500 per month. What is the most that you can borrow? a payment of $1500 and a loan amount of $400,000 top of your mortgage payment, calculate how long it will take you to pay off the loan given the higher payment. (Use interest rate of 3.99% AND the house cost and down payment of scenario #1). Calculate how much interest you will pay in total? Compare this to the valuc that you calculated for #2. You want to determine whether or not you should save some of your money and put only 10% down on your house. Because you are only putting 10% down, lenders require that you purchase private mortgage insurance (PMI). Assume that PMI is 1% of the mortgage amount. 1. Calculate your total monthly payment (mortgage payment plus PMI. 2. Calculate the total cost of financing your home purchase (interest plus PMI). 3. Calculate the total cost of the home purchase. (Down payment plus principal [loan amount] plus interest plus PMI.) 4. Compare this to the costs associated with a 20% down payment. Memo 1. Summarize the results of each of your calculations. "Summarize" 2. Discuss the interest savings associated with an extra payment of $300 3, Compare the costs and benefits of a 10% down payment versus a 4. Discuss Private Mortgage Insurance. What is it? Why do lenders means to tell me the most important results, not list all of them.) per month ( Scenario #4). 20% down payment. require it? What is the benefit to the borrower