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%.
- What will be your monthly mortgage payments?
- How much of your first month’s payment goes toward paying off interest? How much goes toward paying off the loan balance?
- How much do you still owe after 5 years (i.e., just after your 60th monthly payment)?
- How long will it take you to reduce your loan balance by half (i.e., ≤$400,000)?
- 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
jeff jeffy answered 10 months agoRelated 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
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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
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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?
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