Dream Debt 2: Doubling Down

Definitions:

• Purchase Price: Enter the purchase price of the house, condo, or other domocile of your choice.
• Down Payment: Enter the down payment for the home.
• Closing Cost: I don't know how to determine closing cost. I've been told 4000 is a reasonable number.
• Prepaid Cost: This has something to do with unpaid taxes, and depending on when you buy, could be negative if taxes are paid more than once a year. Just put the same number as closing cost.
• Property Taxes: You pay this forever now.
• Home Insurance: Watch out for acts of flying pasta.
• Mortgage Insurance: "Ok see, we don't think you can afford this loan, so we're gonna charge you extra."
• Term: You really want to outlive this.
• Mortgage Rate: Fun fact: every $25/month of mortgage insurance is roughly equivalent to adding 0.1% to the mortgage rate on a $400k home.
• Principal & Interest: PI = (Purchase Price - Down Payment) × (Mortgage Rate / 12) / (1 - (1 / ((1 + Mortgage Rate / 12) ^ (Term × 12)))). The ratio of P & I changes over time, visualized in the plot above.
• Monthly Payment: PI + taxes + insurance + insurance.
• Total Paid: Monthly Payment × Term × 12 + Down Payment + Closing Cost + Prepaid Cost

Disclaimer:

This is not an investing tool. Do not use this as an investing tool.