Chapter 13 Homework - Mortgages You have found a home you would like to purchase. The Purchase Price is 150,000 with a down payment required of 10%. The Property Tax for the property is $1600 yr. (refer to examples 7 and 8 on pp 720-721) Your research of mortgage rates yielded the following 30 year fixed 3.99% 15 year fixed 3.125% Quicken loans: 6Jun2013 Calculate the following. 1. Calculate the mortgage amortization payment for a 30 year loarn. 2. Calculate the total payment when you include the property tax. 3. Calculate the mortgage amortization payment for a 15 year loan. 4. Calculate the total payment when you include the property tax. You want to also determine how much your payments would be reduced if you considered the effect of taxes interest payments and property taxes are a deductible expense. 5. If you are in a combined (state + federal) tax bracket of 30%, calculate the monthly savings when interest and property taxes are included. In addition, you estimate that homeowners insurance will be about $660/year and maintenance costs will average about $2000/year. 6. Calculate you total net monthly payments. Use and complete the following table 30year fixed 3.99% 15 year fixed 31 25% 1&2: Monthly Mortgage amortization payment 3&4 Monthly Mortgage amortization payment + property tax 5 Monthly saving with tax deductions Net Monthly payment (after tax savings) Homeowners insurance/month Maintenance/month 6 Total Net Monthly Expense (after tax savings) Total of Mortgage (amortization payments) over life of loan Total Interest paid over life of loan. 7. Which loan would you choose? Why