Project 02: Loan Analysis

Over the past several months, a great deal of coverage has been given to a "mortgage crisis" in the U.S. housing market.  Write at least two paragraphs on this crisis.  Your write-up should include, but is not limited to, the following items:  a description of the crisis, its causes, and how it has affected the housing market and homeowners.  You should cite two different web sites as part of your research, and these sites should be reputable and trustworthy.  Write an additional paragraph on your analysis of the validity of the web sites you use.  (Recall your notes from September 7, when Instructional Librarian Mary Murray led a session on analyzing web sites.)  While you may feel free to use Wikipedia as a starting point for your research, you should not use it as one of your cited references.

Next, you should find an advertisement of something you would like to purchase (house, car, boat, etc.) that costs more than $5000.  Include a valid link, screen capture, or scanned image of the advertisement in your write-up.  You should also give a brief explanation as to why you chose this particular item.  Then find at least two different loan options for purchasing this item.  Just as you did for the advertisement, you should include a valid link, screen capture, or scanned image of each loan offer.  The loan offers should be sufficiently different -- for example, variations can be in loan duration, interest rate, amount of down payment required, and points (or other closing costs).

Then, for each of the two loan offers you found above, perform an analysis of the payment plan.  First, find the monthly payment.  Next, develop the payment schedule (using Excel) for the first twelve months of your loan. (The payment schedule should be similar to the one found on page 161 of your book, and you should recall Activity 9.1 as you complete this part of the project.  Include a copy of the Excel spreadsheet for only the first twelve months in your write-up -- I don't want to see 30 years of payments!)  Then, compute the total interest paid (for the entire loan duration) for each plan.  Compare these characteristics of the two loans.

Some of the metrics used to grade your paper will include:

• Inclusion of a title.
• An introductory paragraph which describes the purpose of the paper and why it is of interest.
• A coherent write-up, with transitions between different elements.
• A concluding paragraph which summarizes the main ideas of the write-up.
• Presentation (as implied above, you should use MS Word) including labeled graphs, spelling, and punctuation.
• Quality and appropriateness of graphs (if applicable).
• Clarity, quality, and depth of written descriptions and explanations.
• Choice of supporting data or articles from the web.
• Clarity and accuracy of the web-site evaluation.
• Appropriateness of chosen loan options.