By: Stephanie Nando Lopez Home buying project By: Stephanie Nando Lopez

Career information Occupation: Pediatric Psychiatrist Starting Annual Salary: $205,794 Starting Monthly Salary: 205,794/12= $17,149.50 28% of Monthly Income: 4,801.86*.28= $4,801.86 Max Mortage Max Purchase Price Information from salary.com (http://swz.salary.com/SalaryWizard/Pediatric- Psychiatrist-Salary-Details-90265-Malibu-CA.aspx) 30 yr. / 3.825% rate 15 yr. / 3.001% rate 4,801[(1+.03825/12)^360 -1] /(.03825/12)/(1+.03825/12)^360 =$1,027,395.91 4,801.56[(1+.03001/12)^180-1] /(.03001/12)/(1+.03001/12)^180 =$695,287.18 1,027,395.91/.85 =$1,208,701.07 695,287.18/.85 =$817,984.92

HOME Information 29500 Heathercliff Rd. Spc 68 Malibu, CA 90625 I chose this home because it’s on the beach, and it’s so pretty. It’s close enough to my dream home. Information from zillow.com(http://www.zillow.com/homes/29500- Heathercliff-Rd-Spc-68-malibu,-ca_rb/)

Home information Purchase Price: $799,000 15% Down Payment: .15x799,000=$119,850 Closing Costs: 119,850 +( .03x799,000)= $143,820 PMI costs: .0075x(3,174.22x12)= $285.68 Home Insurance (Annual): .003x799,000= $2,397 Property Tax: .0125x799,000-2,397= $7,590.50

Loan Information 30 Year Loan: Rate: .03825 Monthly Mortgage Pymt: $3,174.22 Total including dp. over 30 yrs: 3,174.22x360+119,850= $1,262,569.20 Total Interest over 30 yrs: 1,262,569.20-799,000= $463,569.20 Majority of pymt goes to principalv not interest at: Month 146 Stop paying PMI at: .80x799,000= $639,200 = month 38 If sold home after 7 yrs, I’d owe $582,097.85 month 84 The total monthly home payment goes really well with my monthly salary of $17,149.50 Information from: http://www.zillow.com/mortgage-rates/

Loan Information 15 Year Loan Rate: .03001 Monthly Mortgage Pymt: $4,690.41 Total including dp. over 30 yrs: 4,690.41x180+119,850= $964,123.80 Total Interest over 30 yrs: 964,123.80-799,000= $165,123.80 Majority of pymt. goes to principal not interest at: the first month! Stop paying PMI at: .80x799,000= $639,200 = month 14 If sold after 7 yrs. I’d owe: $399,863.95 month 84 This loan also goes well with my monthly and yearly salary. Information from: http://www.zillow.com/mortgage-rates/

Loan Information 30 Year + 200 Rate: .03825 Monthly Mortgage Pymt: $3,174.22 Total including dp. over 30 yrs: 3,174.22x360= $1,072,886.36 + 119,850 = $1,192,736.36 Total interest over 30 yrs: $1,192,736.36 - $799,000 = $393,736.36 Majority of pymt goes to principal not interest at: Month 144 Stop paying PMI at: .80x799,000= $639,200 = month 32 If sold after 7 yrs, I’d owe: $565,297.85 month 84 This loan also goes well with my monthly and yearly salary. Information from: http://www.zillow.com/mortgage-rates/

Renting vs. Buying Rental #1 Rental #2 Rental #3 12554 Yerba Buena Rd. Malibu, CA 90265 3 beds ~ 2 baths ~ 2,000 sqft $4,500/mo 25119 Malibu Rd. Malibu, CA 90625 5 beds ~ 3.75 baths ~ 2,548 sqft $3,400/mo 28711 Pacific Coast Hwy Apt 22 2 beds ~ 2 baths ~ 1,007 sqft $3,500/mo Yearly: 4,500*12= 54,000 3 year cost: 162,000 Yearly: 3,400*12= 40,800 3 year cost: 122,400 Yearly: 3,500*12= 42,000 3 year cost: 126,000 Mean: 4,500 + 3,400 + 3,500 = 11,400 / 3 = 3,800 Information from: http://www.zillow.com/homes/for_rent/house,condo,apartment_duplex,mobile,townhouse_type/814216-1221324_price/3000-4500_mp/globalrelevanceex_sort/34.124452,-118.56205,33.940084,-118.880997_rect/11_zm/

Renting PROS: Easier to move Not responsible for repairs/maintenance CONS: Can’t build equity Monthly pymt can increase Can’t receive tax benefits Can’t remodel with out owner’s approval

buying PROS: You can build equity You have advantage of tax breaks Payments will be stable You have freedom to remodel and make the place your own You can use your home as an investment CONS: Pay for your own maintenance Must pay property tax Home could lose value Homeowner’s Insurance is mandatory if you have a mortgage

Reflection I honestly learned a lot through out this project. I had no idea what home buying was about up until this math course. I learned how to calculate a max mortgage payment size and a max purchase price based on income. Basically I learned how to calculate how much house I can afford. My feelings about ownership have changed a bit. Not in a bad way though. I feel more secure about when the time comes. I will know what to do, what to calculate, look for, and watch out for. I’m very thankful I got to learn about the home buying process!