The chosen home for two children and two dogs meets all the necessary requirements: it is equipped with two bathrooms, four bedrooms, and a backyard for playing. The internal infrastructure is also at the highest level; a large area allows freely keeping pets and arranging a place for them. As they grow up, each child will have their room. Finally, the house has a garage that can accommodate two cars, which is also a profitable investment for the future. Currently, my dream home is worth $449,000 (Zillow, 2022). The high price is justified by the relevant requirements and high comfort level.
Down payment is the amount the buyer must pay to the seller immediately if the house is bought with a mortgage: as a rule, this rate is at least 3.5% of the total purchase price and can reach up to 20% (US Bank, 2022). It is assumed that 20% was paid as a down payment of $89,800. Accordingly, the loan amount is $359,200. If I choose a mortgage program for 30 years, for which today the interest rate is 7.05%, the monthly payment will be $2,402 or $2,401.84 exactly. The monthly interest rate can be found by dividing the annual rate by 12: the result is 0.5875%. In the first month, an amount equal to $2150.77 will go to interest on the loan, while only $251.07 will go to the body of the mortgage. If we present the payment structure as a percentage, then 89.5% of it is occupied by interest, while only 10.5% is the principal debt. Accordingly, after the payment made at the beginning of the second month, the remaining amount due is $358,948.93.
References
US Bank. (2022). What is average down payment on a house? Web.
Zillow. (2022). 13619 E 6th Ave, Spokane Valley, WA 99216. Web.