1.  Use the Amortization spread sheet to help you complete the following:

        Option 1:  30 year fixed rate at 8% to buy a $100,000 home.

                Periodic Payment =

                Total Payments (Actual) =

                Total Interest =

        Option 2:  20 year fixed rate at 8% to buy a $100,000 home.

                Periodic Payment =

                Total Payments (Actual) =

                Total Interest =
 

        Compare the results above and discuss the pros and cons the two options.
 
 
 
 
 
 

2.  Use the Amortization spread sheet to help you complete the following:

          Option 1:  30 year fixed rate at 8% to buy a $120,000 home.

                Periodic Payment =

                Total Payments (Actual) =

                Total Interest =

        Option 2:  30 year fixed rate at 7% to buy a $120,000 home.

                Periodic Payment =

                Total Payments (Actual) =

                Total Interest =

       Option 3:  30 year fixed rate at 6% to buy a $120,000 home.

                Periodic Payment =

                Total Payments (Actual) =

                Total Interest =
 

    Does a percentage point or two make much difference in a mortgage?
 
 
 

3.  Use the Amortization spread sheet to help you complete the following:

          Option 1:  30 year fixed rate at 8% with 500.00 in closing costs to buy a $80,000 home.

                Periodic Payment =

                Total Payments (Actual) =

                Total Interest =

                Total Payments (including closing costs) =

        Option 2:  30 year fixed rate at 7.5% with $2000.00 in closing costs to buy a $80,000 home.

                Periodic Payment =

                Total Payments (Actual) =

                Total Interest =

                Total Payments (including closing costs) =

        Which option requires you to pay more money to the lender?  How much more?