Williams mortgage | Business & Finance homework help
The monthly mortgage payment on Jerry’s mortgage will depend on a number of factors, including the amount borrowed, the interest rate charged, and the repayment period.
For example, if Jerry has taken out a loan of $200,000 with an interest rate of 4% over 30 years (360 months), his monthly payments would be approximately $954 per month. This includes both principal and interest repayments. The total amount paid over the life of the loan will be around $343,739.
However, if Jerry has chosen a 15-year repayment term instead (or 180 months), he can expect to pay around $1,521 per month in order to reduce his borrowing costs by paying off his loan more quickly. In this case, he would have paid back a total of approximately $272,235 by the end of his repayment period – significantly less than for a 30-year loan due to the lower interest costs associated with shorter terms.
Additionally, if Jerry is able to make additional payments throughout his repayment period or refinance into a lower interest rate at any point during their loan term then their monthly payments may vary from those outlined above. It’s also worth remembering that there are other fees such as setup fees that can be incurred when taking out a mortgage which must also be accounted for when considering your budgeting expectations each month.