Name: __________________________________________ Date_________________

Week 3 Activity: Mortgage Journal

I. Provide a Screenshot of Sales Page of the Property. Make sure to include

the following in this section:
 Picture of Property
 Sales Price of Property
 Description of Property
 Link to the Property Sales Page

Sales Price of Property

$188,500

II. Your instructor will give you information about the mortgage for the
property. Add the information given by your instructor below:

Down Payment 10%

Required (List %):
Number of Points at 1 point
Closing
Mortgage Time Frame 25 years
for Loan:
Interest Rate (List %): 8%
Annual Insurance $1800
Amount:
Annual Property Taxes $2500
Amount:

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III. Calculations—Make sure to round all values on this journal to the nearest
cent (Two Decimal Places). Make sure to SHOW WORK on parts b) – f).

a) Sale Price of Property: $188,500

b) Find the required down payment.

$188,500 (.10)= 18,850

c) Find the amount of the mortgage.

Amount of the mortgage= Property Sale Price – down payment

$188,500 - 18,850 = 169,650

d) How much must be paid for points at closing?

1 point = 1%
169,650 (0.01) = 1696.50

e) Find the monthly payment (excluding escrow taxes and insurance).

PMT =
P ( nr )
( )
−nt
r
1− 1+
n

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 0.08
169,650( )
12
−12(25) = 1309.39
PMT =
(
1− 1+
0.08
12 )
f) Find the total interest paid over the timeframe of the loan.
1309.39 (12)(25)
392,817
I = 392,817 - 169,650 = 223,167

IV. Prepare a loan amortization schedule for the first three months of the
mortgage. Show work for calculations below the table. Round values to two
decimal places.

This is the amount you will use on the Loan Amortization Table Below:
Payment Monthly I P L
Number Payment Interest Principal Balance of
Payment Payment Loan
1 1309.39 1131 178.39 169471.61
2 1309.39
3 1309.39

Mortgage amount= 169,650 (part II -C)

Work for Payment #1:

I: interest; P: principal; L: loan

I= prt
0.08
169,650 ( 12 ) (1)
1131

P= monthly payment- interest = 1309.39 – 1131

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178.39

L = mortgage – principal = 169,650 - 178.39

169471.61

Payment Monthly I P L
Number Payment Interest Principal Balance of
Payment Payment Loan
1 1309.39 1131 178.39 169,471.61

2 1309.39 1129.81 179.58 169,292.03

3 1309.39

Work for Payment #2:

0.08
I= prt = 169471.61 ( 12 )
1129.81

P= monthly payment - interest = 1309.39 - 1129.81

179.58

L=169471.61 - 179.58
169,292.03

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Payment Monthly I P L
Number Payment Interest Principal Balance of
Payment Payment Loan
1 1309.39 1131 178.39 169,471.61
2 1309.39 1129.81 179.58 169,292.03
3 1309.39 1128.61 180.78 169111.25

Work for Payment #3:

0.08
I= prt = 169,292.03 ( 12 ) = 1128.61

P= monthly payment - interest = 1309.39 - 1128.61= 180.78

L=169,292.03 - 180.78
169111.25

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Calculate your ACTUAL Monthly Payment:

a) How much is the annual insurance amount? _______________________

Divide the amount by 12 to determine the monthly insurance payment: _______

b) How much is the annual escrow taxes? _____________________

Divide the amount by 12 to determine the monthly escrow tax payment: ______

c) Add the monthly insurance payment and monthly escrow tax payment to
your monthly mortgage payment:

Actual Monthly Payment: ________________________

V. Conclusion Questions

1. Describe what happens to the portion of payments going to principal and

interest over the life of a mortgage.

__________________________________________________________________________________________

__________________________________________________________________________________________

2. Describe what would happen to the monthly payment and total interest if
the mortgage time frame was cut in half.

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__________________________________________________________________________________________

__________________________________________________________________________________________

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