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Mortgage Project Reflective Writing

Nashjam Alvarez
Professor Kulinsky
Math 1030
October 16, 2021
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The Mortage Project for Math 1030 was an assignment that provided an insight of

what it is like to own a house and the payments that come with it. The project went over

the cost, the loans amounts, monthly payments, and how to find the cost for every

payment going towards the home. In order to find the price, we used certain formulas for

each. We used the loan formula to find the monthly payment and the compound interest

formula to find future value of the home after owning it for a certain amount of time.

During this lab we also used simple math to change the percentage interest rate into a

decimal in order to use it on the formulas used. Lastly, the formula that was commonly

used in this project was the interest formula which was used to find the interest of the

payments made.

The assignment also provided the student to compare the differences between a

house with a longer loan than the other. It also gave insight on what an additional

payment could do to change the outcome of the total amount. The original price, interest

difference, and monthly were compared in the end to see which had the better outcome.

This assignment helped to see how mathematics can be used in the real world.

With someone with no experience in finance, this assignment helped me understand what

can be used during the process of buying a house. This assignment can help anyone

looking into a mortage loan and seeing if they are able to afford the final payment

amount.
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These formulas can also be used not only with a mortage loan but also a car loan

and any other loan that can be taken out. The interest formula can help anyone taking out

a loan and seeing what they end up paying in interest if a loan is taken out.

As a mortgage broker, they have very important roles in their job. According to

“What is a Mortgage Broker?”, it is important to be able to explain the details of this

project to clients because it can help the client understand what they are expected to pay

and what they are going to have put aside in order to pay their loan. This is excluding

other payments the client might already make. It is a responsibility for the mortage broker

to have their client understand what they are going to be responsible for. If the client

cannot make the payments, the lender can file a notice or can add penalty fees.

When the 30-year, 15-year, and 30-year with extra payment plans were compared,

it helped to understand the pros and cons of each. The 30-year loan with 10% as down

payment had the monthly payment of $1,026.29. The total amount paid for the 30 years

was $369,462.60. The interest paid over the 30 years was $160,842.60. The 15-year loan

had the monthly payment of $1,506.80. The total amount paid for the 15 years was

$271,224.46. The total interest paid was $62,604.46. The 30-year loan with extra

payments of $100 had the monthly payment of $1126.29. The total amount paid was

$340,098. The total interest paid was $131,478.42.

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The pros of having a 30-year loan are that the monthly payments are lower than

the other two options. The cons are you pay more interest in this option than the other

two, and the total amount is more than the other two options.

The pros of the 30-year loan with extra an extra monthly payment of $100 dollars

had the pros of having the total amount lower than the regular 30-year monthly payment

and the interest paid overall was lower than the regular 30-year loan. The cons of this

loan are the monthly is higher by 100$.

The 15-year loan had the cons of having the highest monthly payments. The pros

of this loan were the total amount and interest amount spent was much lower than the

other two options. The interest paid was almost half of what the other two loans interest

amounts were.

This assignment changed my mind about the usefulness of mathematics in the real

world. In most math classes, they do not go over where you can use the math you are

learning. This assignment shows you how and where to use the formulas that were taught

throughout the lesson. It can be hard to automatically know when to use certain math

formulas. This project helped me understand and have a higher understanding why math

is important in many careers. This assignment helped me rethink my career path. The

career that I would like makes between 35,000 to 65,000 annually which is pretty average

according The Bureau Labor of Statistics. It makes me rethink owning a house because

not everything was taken into consideration in this project. It is not including utilities,
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food, auto, and other expenses that need to be paid monthly. It helped me rethink my

savings and financial choices.

In conclusion, this project was very helpful to understand how a loan and interest

can affect the amount you are paying for a house. It was helpful to see the differences an

interest rate and loan length can change the outcome of the payments. This assignment

gives a student an insight on home buying and what to take into consideration.
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References

Bureau of Labor Statistics (2021) USUAL WEEKLY EARNINGS OF WAGE AND

SALARY WORKERS SECOND QUARTER 2021 Press Office.gov Usual Weekly

Earnings of Wage and Salary Workers - 2nd Quarter 2021 (bls.gov)

Corporate Finance Institute (2015-2021) What is a Mortage Broker? CFI Mortgage

Broker - Overview, Duties, Advantages, and Disadvantages

(corporatefinanceinstitute.com)