Mortgage lenders base the mortgage interest rate they offer you on your credit rating. This makes it financially critical to maintain a credit score of 700 or higher. How much more interest would you pay on a $195,000 home if you put 20% down and financed the remaining with a 30-year mortgage at 6% interest compared to a 30-year mortgage at interest?

Answer 1

Loan amt. = 0.8 * 195,000 = $156,000

P = Po*r*t/(1-(1-(1+r)^-t)

r = (6%/12)/100% = 0.005 = Monthly % rate expressed asva decimal.

t = 30yrs * 12mo/yr = 360 Months.

P1 = (156000*0.005*360)/(1-1.005^-360) =
$336,707.57
I = P-Po =

P2 = (195000*0.005*360)/(1-1.005^-360) =
$420,884.47
I = P2-Po

Answer 2

Correction:
P = (Po*r*t)/(1-(1+r)^-t).