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    Mortgage Lab Signature Assignment

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    The document discusses the importance of understanding financial literacy and how to calculate loans. It explains how the assignment calculated home loan amounts, payments, and interest using formulas. It also discusses how understanding these calculations could have helped the author avoid issues with an auto loan. The document stresses that financial literacy should be taught to all, as small differences in loan terms can greatly impact the total interest paid over the life of the loan.

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    Mortgage Lab Signature Assignment

    Uploaded by

    api-285508405
    103 views2 pages
    The document discusses the importance of understanding financial literacy and how to calculate loans. It explains how the assignment calculated home loan amounts, payments, and interest using formulas. It also discusses how understanding these calculations could have helped the author avoid issues with an auto loan. The document stresses that financial literacy should be taught to all, as small differences in loan terms can greatly impact the total interest paid over the life of the loan.

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    mortgage lab signature assignment

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    The document discusses the importance of understanding financial literacy and how to calculate loans. It explains how the assignment calculated home loan amounts, payments, and interest using formulas. It also discusses how understanding these calculations could have helped the author avoid issues with an auto loan. The document stresses that financial literacy should be taught to all, as small differences in loan terms can greatly impact the total interest paid over the life of the loan.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    103 views2 pages

    Mortgage Lab Signature Assignment

    Uploaded by

    api-285508405
    The document discusses the importance of understanding financial literacy and how to calculate loans. It explains how the assignment calculated home loan amounts, payments, and interest using formulas. It also discusses how understanding these calculations could have helped the author avoid issues with an auto loan. The document stresses that financial literacy should be taught to all, as small differences in loan terms can greatly impact the total interest paid over the life of the loan.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    For this assignment we were asked to calculate several financial aspects of buying a

    home. To do so, we would calculate income, down payments, and loan amounts. Then we

    would use the loan formula and compound interest formula to calculate average monthly

    payments/amount of interest paid after x amount of years, etc.

    I think this project does an exceptional job at showing how math can be used in the real

    world. Financial literacy is not something that is taught at all schools so there are many people

    who have no idea what they’re doing when they’re attempting to get loans. I didn’t know what I

    was doing when I got my second car loan and I’ve been stuck paying an outrageous amount

    each month for years because of it. Knowing how to calculate with this kind of math could have

    saved me from what I’m now experiencing and I wish I would have been taught this sooner.

    As I stated above, this type of math isn’t only used for housing loans and can be

    beneficial for all other types of loans. I could see it being used for car loans as well as getting a

    generic loan. Anything where interest is involved.

    If I were a mortgage broker it would be important to explain this information to clients

    because small amounts of changes made can make drastic changes to the length of the loan

    and how much interest you end up actually paying. In the lab itself we changed the monthly

    payment and added a hundred extra dollars a month to it and it shaved off years and cut the

    amount of interest paid by almost $40k. Many won’t know this, so it is important to explain as

    best as you can how important it is to be aware of the amount of money you are spending.

    Each loan type (30 year, 15 year, and 30 year with extra payments) had their

    advantages and disadvantages. For the 30 year loan you are paying the least amount possible,

    but you also end up paying the most interest. It’s a pretty significant amount more compared to

    the 15 year loan. With the 15 year loan you’re paying the absolute most each month - a couple

    hundred dollars more. However, you’re shaving the time you have to pay the loan in half and by

    doing so you’re paying a much smaller amount of interest. The best of both worlds seems to be

    the 30 year loan with extra payments. 100 dollars more each month isn’t that significant of a
    difference payment wise, but it cuts the time you’re paying down by 5 years and significantly

    decreases the amount you’re paying towards interest.

    While this project didn’t change my opinion on the usefulness of math (I already know

    that it’s incredibly handy) this project, as well as the entire finance section of this class, has

    taught me that it’s extremely important to get your math right. When calculating financial

    equations your numbers can be way different than what they’re supposed to be if you round the

    numbers to the wrong degree. It’s why I think financial literacy is important and these types of

    equations (especially how you’re supposed to calculate them) should be taught to everybody.

    We were also asked in this assignment to calculate the average salary our future

    profession will make and compare it to what we’ve calculated in this lab. I want to be a lab

    biologist. What I found was that the average salary of a lab biologist was $41k per year which is

    $3416.66 per month. However, that isn’t take home pay. I can already tell that I would be making

    less each month than what was recommended by the imaginary person in the lab trying to buy

    this particular house. As far as how that makes me feel about buying a house myself, I am

    fortunate enough to be a dual income household where my partner makes significantly more

    than that, so I’m not very worried. If we were ever to divorce though I would definitely want to

    see what I could do to make more because that amount of money definitely makes me a little

    nervous.

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