4. You just took a fixed-rate mortgage for $250,000 at 4.50% for 30 years, monthly payments,...
4. You just took a fixed-rate mortgage for $250,000 at 4.50% for 30 years, monthly payments, two discount points. Before you make any payments you receive a nice raise so you plan to pay an extra $160 per month on top of your normal payment.
A. (1 pt) What is your net interest savings over the life of the loan, assuming the
loan is held to its maturity?
Answer: ________
B. (1 pt) If you make this higher payment and hold the loan for its full life, what
is the effective cost of the loan?
Answer: ________
Homework Answers
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4. You just took a fixed-rate mortgage for $250,000 at 4.50% for
30 years, monthly payments,...
Your local lender offers you a fixed-rate mortgage with the following terms: $220,000 at 4.75% for...
Your local lender offers you a fixed-rate mortgage with the following terms: $220,000 at 4.75% for 30 years, monthly payments. The lender will charge you two discount points and the loan has a 3% prepayment penalty. A. (1 pt) What is the annual percentage rate (APR) of the loan? Answer: _______ B. (1 pt) How many points are required to yield an APR of 5.25%? Answer: _______ Suppose you take a fixed-rate mortgage for $200,000 at 5.00% for 30 years,...
would like both problems done or at most #3 ! 2. Suppose you take a $300,000...
would like both problems done or at most #3 !
2. Suppose you take a $300,000 thirty year fixed-rate mortgage at 5.75% two discount points, monthly payments. At the end of the second year you inherit $20,000 from your now-favorite aunt. You decide to apply this $20,000 to the principal balance of your loan A. (1 pt) How many monthly payments are remaining after the extra lump sum payment is made? B. (1 pt) What is your net interest savings...
1. Your local lender offers you a fixed-rate mortgage with the following terms: $250,000 at 5.25%...
1. Your local lender offers you a fixed-rate mortgage with the following terms: $250,000 at 5.25% for 30 years, monthly payments. The lender will charge you two discount points and the loan has a 4% prepayment penalty for the first 8 years of life. A. (1 pt) What is the annual percentage rate (APR) of the loan? B. (1 pt) What is the effective cost if you prepay the loan at the end of year five? C. (1 pt) Suppose...
#1 Your local lender offers you a fixed-rate mortgage with the following terms: $250,000 at 5.25%...
#1 Your local lender offers you a fixed-rate mortgage with the following terms: $250,000 at 5.25% for 30 years, monthly payments. The lender will charge you two discount points and the loan has a 4% prepayment penalty for the first 8 years of life. C. Suppose that your effective cost over a five-year holding period is 6.50%. What amount of other fees did you pay?
Your mortgage has 25 years left, and has an APR of 5.326 % with monthly payments...
Your mortgage has 25 years left, and has an APR of 5.326 % with monthly payments of $ 1 449 . a. What is the outstanding balance? b. Suppose you cannot make the mortgage payment and you are in danger of losing your house to foreclosure. The bank has offered to renegotiate your loan. The bank expects to get $ 179 968 for the house if it forecloses. They will lower your payment as long as they will receive at...
You need a 15-year, fixed-rate mortgage to buy a new home for $250,000. Your mortgage bank...
You need a 15-year, fixed-rate mortgage to buy a new home for $250,000. Your mortgage bank will lend you the money at a 8.6 percent APR for this 180-month loan. However, you can afford monthly payments of only $850, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. Required: How large will this balloon payment have to be for you to keep your monthly payments...
2.) Consider a fixed-rate mortgage with the following characteristics: loan amount is $133,000 with 30 years...
2.) Consider a fixed-rate mortgage with the following characteristics: loan amount is $133,000 with 30 years to maturity, an interest rate of 7.5% and monthly payments of $929.96. Assume the borrower decides to sell the collateral an get a new property. If the borrower prepays at the end of month 60, what is the amount outstanding on this loan at the time of prepayment? which of these is the answer? (show your work!): $110,145 $122,445 $125,841 $129,302 3.) Consider the...
glancing A home mortgage with monthly payments for 30 years is available at 6% interest. The...
glancing A home mortgage with monthly payments for 30 years is available at 6% interest. The home you are buying costs $120,000, and you have saved $12.000 to meet the requirement for a 10% down payment. The lender charges "points" of 2% of the loan value as a loan origination and processing fee. This fee is added to the initial balance of the loan (a) What is your monthly payment? (b) If you keep the mortgage until it is paid...
Ten years ago you obtained a 30-year mortgage for $400,000 with a fixed interest rate of...
Ten years ago you obtained a 30-year mortgage for $400,000 with a fixed interest rate of 3% APR compounded monthly. The mortgage is a standard fixed rate mortgage with equal monthly payments over the life of the loan. What are the monthly fixed mortgage payments on this mortgage (i.e., the minimum required monthly payments to pay down the mortgage in 30 years)? What is the remaining loan balance immediately after making the 120th monthly payment (i.e., 10 years after initially...
You borrow $100,000 on a mortgage loan. The loan requires monthly payments for the next 30...
You borrow $100,000 on a mortgage loan. The loan requires monthly payments for the next 30 years. Your annual loan rate is 4.25%. The loan is fully amortizing. What is your monthly payment? Round your answer to 2 decimal places. 2. You borrow $100,000 on a mortgage loan. The loan requires monthly payments for the next 30 years. Your annual loan rate is 4.25%. The loan is fully amortizing. What is your Month 1 interest payment? Round your answer to...
would like both problems done or at most #3 !
2. Suppose you take a $300,000 thirty year fixed-rate mortgage at 5.75% two discount points, monthly payments. At the end of the second year you inherit $20,000 from your now-favorite aunt. You decide to apply this $20,000 to the principal balance of your loan A. (1 pt) How many monthly payments are remaining after the extra lump sum payment is made? B. (1 pt) What is your net interest savings...
glancing A home mortgage with monthly payments for 30 years is available at 6% interest. The home you are buying costs $120,000, and you have saved $12.000 to meet the requirement for a 10% down payment. The lender charges "points" of 2% of the loan value as a loan origination and processing fee. This fee is added to the initial balance of the loan (a) What is your monthly payment? (b) If you keep the mortgage until it is paid...
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