Question

In: Finance

You want to buy a $1,000,000 house. Suppose you make a20% down payment today, and you...

You want to buy a $1,000,000 house. Suppose you make a20% down payment today, and you finance the rest of your purchase with a 30‐year fixed rate jumbo mortgage of 4.00%.

        

  1. What will be your monthly mortgage payments?          

        

  1. How much of your first month’s payment goes toward paying   off interest? How much  goes toward paying off the loan balance?  

        

  1. How much do you still owe after 5 years (i.e., just after your 60th monthly payment)?              

        

  1. How long will it take you to reduce your loan   balance by half (i.e., ≤$400,000)?   

        

  1. Suppose in 20 years (just after your  240th monthly payment), you decide to refinance at a 10‐year fixed rate of 3.200%. What will be your new monthly  mortgage payments?

        

Solutions

Expert Solution

jeff jeffy answered 9 months ago
Next > < Previous

Related Solutions

Suppose you want to buy a condominium that costs $320,000. You will make a down payment...
Suppose you want to buy a condominium that costs $320,000. You will make a down payment equal to 20 percent of the price of the condominium and finance the remainder with a loan that has an interest rate of 4.65 percent compounded monthly. If the loan is for 30 years, what are your monthly mortgage payments? Multiple Choice $1,350.89 $1,286.48 $1,320.03 $1,468.12 $1,534.46
1. Suppose you wish to buy a house for $500,000. You make a 25% down payment...
1. Suppose you wish to buy a house for $500,000. You make a 25% down payment and borrow the rest at an interest rate of 6% for 30 years. (a) What is your annual repayment? (b) Repeat the above assuming a mortgage term of 25 years. 2. Suppose you borrow $20,000 to buy a car. The interest rate is 11% and the loan is for 8 years. (a) What is your annual repayment? (b) What is the remaining balance after...
1. Suppose you wish to buy a house for $500,000. You make a 25% down payment...
1. Suppose you wish to buy a house for $500,000. You make a 25% down payment and borrow the rest at an interest rate of 6% for 30 years. (a) What is your annual repayment? (b) Repeat the above assuming a mortgage term of 25 years. 2. Suppose you borrow $20,000 to buy a car. The interest rate is 11% and the loan is for 8 years. (a) What is your annual repayment? (b) What is the remaining balance after...
You want to buy a house that costs $210,000. You have $21,000 for a down payment,...
You want to buy a house that costs $210,000. You have $21,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $189,000. However, the realtor persuades the seller to take a $189,000 mortgage (called a seller take-back mortgage) at a rate of 5%, provided the loan is paid off in full in 3 years. You expect to inherit $210,000 in 3 years, but right now all you have is $21,000, and...
You want to buy a house that costs $180,000. You have $18,000 for a down payment,...
You want to buy a house that costs $180,000. You have $18,000 for a down payment, but your credit is such that mortage companies will not lend you the required $160,000. However, the realtor persuades the seller to take a $160,000 mortage (called a seller take-back mortage) at a rate of 7%, provided the loan is paid off in full in 3 years. You expected to inherit $180,000 in 3 years; but right now all you have is $18,000, and...
You want to buy a house that costs $100,000. You have $10,000 for a down payment,...
You want to buy a house that costs $100,000. You have $10,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $90,000. However, the realtor persuades the seller to take a $90,000 mortgage (called a seller take-back mortgage) at a rate of 9%, provided the loan is paid off in full in 3 years. You expect to inherit $100,000 in 3 years; but right now all you have is $10,000, and...
You want to buy a house that costs $230,000. You have $23,000 for a down payment,...
You want to buy a house that costs $230,000. You have $23,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $207,000. However, the realtor persuades the seller to take a $207,000 mortgage (called a seller take-back mortgage) at a rate of 8%, provided the loan is paid off in full in 3 years. You expect to inherit $230,000 in 3 years, but right now all you have is $23,000, and...
You want to buy a house that costs $100,000. You have $10,000 for a down payment,...
You want to buy a house that costs $100,000. You have $10,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $90,000. However, the realtor persuades the seller to take a $90,000 mortgage (called a seller take-back mortgage) at a rate of 10%, provided the loan is paid off in full in 3 years. You expect to inherit $100,000 in 3 years, but right now all you have is $10,000, and...
You want to buy a house that costs $320,000. You have $32,000 for a down payment,...
You want to buy a house that costs $320,000. You have $32,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $288,000. However, the realtor persuades the seller to take a $288,000 mortgage (called a seller take-back mortgage) at a rate of 5%, provided the loan is paid off in full in 3 years. You expect to inherit $320,000 in 3 years, but right now all you have is $32,000, and...
Suppose you want to accumulate $9,365.60 for a down payment for a house. You will deposit...
Suppose you want to accumulate $9,365.60 for a down payment for a house. You will deposit $400 at the ending of every 2 months in an account that credits interest every 2 months at the rate of 18% per annum. How long will it take you to achieve your goal?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT