Bubba bought his house 20 years ago, he is borrowed $200,000 with a 30-year mortgage with...

Bubba bought his house 20 years ago, he is borrowed $200,000 with a 30-year mortgage with a 5.0% APR. His mortgage broker has offered him a 10-year mortgage with a 4% APR with 3 points closing costs. What is Charlie's old monthly payment? What is the balance on Bubba's mortgage? What is Bubba's new monthly payment? What are Bubba's present value savings after paying the points if he plans to live in the house until the mortgage is paid off?

Solutions

Expert Solution

1. Charlie's old monthly payment = $ 1,084

2. Balance on Bubba's Mortagage = $100,462

3. New monthly payment = $ 1,032

4. Bubba's present savings = $ 242

For detailed workings, kindly refer the screenshots below

jeff jeffy answered 3 weeks ago

Next > < Previous

Related Solutions

Five years ago, Marcus bought a house. He secured a mortgage from his bank for $1,720,000....

Five years ago, Marcus bought a house. He secured a mortgage from his bank for $1,720,000. The mortgage had monthly payments for 20 years with an interest rate of 6.0% compounded monthly. However, after five years, it is time to renegotiate the mortgage. Interest rates have fallen to 4.5% compounded monthly, and Marcus still intends to make monthly payments and to pay back the debt over the remaining 15 years. a) How much were Marcus' initial monthly payments? b) What...

Tom Miller owns a house that he bought 5 years ago for $200,000. He financed the...

Tom Miller owns a house that he bought 5 years ago for $200,000. He financed the purchase with an 80% LTV loan at 7% interest and a 30-year amortization term with monthly payments. Interest rates have since fallen and a new loan (which is equal to the balance of the original loan) is now available at 5.25% interest rate with 4 discount points and is amortized over 25 years with monthly payments. Neither mortgage requires a prepayment penalty. Assume that...

Brian mortgaged $200,000 on his house 10 years ago. The mortgage was 25-year fixed rate at...

Brian mortgaged $200,000 on his house 10 years ago. The mortgage was 25-year fixed rate at 8%. He realizes today that a refinance opportunity is available at 5% for the rest of his mortgage. Assume there are no additional fees. For simplicity, assume annual mortgage payment. Please show all your work. a.) What was Brian’s annual mortgage payment? b.) If he took the refinance opportunity, what is his new annual mortgage payment? Do not use Excel, please. Need to make...

Amortize a 30-year mortgage for a $200,000 house cost with a 20% down payment. The mortgage...

Amortize a 30-year mortgage for a $200,000 house cost with a 20% down payment. The mortgage interest rate is 4.125%. How much is the monthly payment? How much will the borrower pay in total interest?

Jackie bought a $200,000 house and has a 30 year mortgage at anominal interest rate...

Jackie bought a $200,000 house and has a 30 year mortgage at a nominal interest rate of 4.8% convertible monthly. Jackie must pay level payments at the end of each month. Find the amount of her monthly mortgage payment. After 200 payments have been made, what is the ratio of total interest paid to total principal repaid?

Several years ago, Bill Smith borrowed $125,000 to buy his house. He has a 15 year,...

Several years ago, Bill Smith borrowed $125,000 to buy his house. He has a 15 year, monthly payment mortgage with an interest rate of 8.75 percent per annum. Bill is thinking about refinancing his house so he would like to know the payoff on his current loan. Assuming that he just made payment number 109 , compute the payoff on Bill's loan. (Round your answer to 2 decimal places; record your answer without commas and without a dollar sign).

Several years ago, Bill Smith borrowed $125,000 to buy his house. He has a 15 year,...

You bought a house 8 years ago with a $250,000 mortgage. It was a 15 year loan with

You bought a house 8 years ago with a $250,000 mortgage. It was a 15 year loan with monthly payments which will pay off the loan when you make the last payment. The interest rate was 6%. What are your monthly payment and your current loan balance? How much interest will you pay in the upcoming year?

Jingfei bought a house 6 years ago for $200,000. Her down payment on the house was...

Jingfei bought a house 6 years ago for $200,000. Her down payment on the house was the minimum required 10% at that time she financed the remainder with a 30-year fixed rate mortgage. The annual interest rate was 8% and she was required to make monthly payments, and she has just made her 72th payment. A new bank has offered to refinance the remaining balance on Jingfei's loan and she will have to pay $1,320 per month for the next...

QUESTION 1: Several years ago, Bill Smith borrowed $125,000 to buy his house. He has a...

QUESTION 1: Several years ago, Bill Smith borrowed $125,000 to buy his house. He has a 15 year, monthly payment mortgage with an interest rate of 8.75 percent per annum. Bill is thinking about refinancing his house so he would like to know the payoff on his current loan. Assuming that he just made payment number 106 , compute the payoff on Bill's loan. (Round your answer to 2 decimal places; record your answer without commas and without a dollar...

Subjects