Mr. Davidson plans to buy a house at Sugar Land in May 2015. The sale price is $

Question

Mr. Davidson plans to buy a house at Sugar Land in May 2015. The sale price is $566,000. He is going to pay 20% down payments and borrow additional 80% from Bank of America with a 30-year, 3.6% fixed-rate mortgage loan. He is expected to pay an equal MONTHLY payment starting from June 2015 for a total of 30 years.

(1) Calculate the required monthly mortgage payment for Mr. Davidson.

(2) Construct the 2015~2020 amortization table for Mr. Davidson.

(1)   When Mr. Davidson prepares his 2015 tax filing, what is the total mortgage interest payment that he can consider for deduction?

Explanation / Answer

Answer 1:

Note: Calculation of

Answer 2:

Answer 3:

Total interest payments for 2015 : $16134

Monthly payments( 30 year Mortgage) A. Total Amount $566,000 B. Down payment $113,200 C. Loan amount $452,800 D. Number of years 30 E. Loan Interest rate (3.6% /12) 0.30 F. Cumulative PV factor @ 0.30% for 360 months 206.57 G. Monthly motgage payments $2,192.04

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