Question

In: Finance

Assume that 8 years ago you borrowed $200,000 as a 30-year mortgage on your home with...

Assume that 8 years ago you borrowed $200,000 as a 30-year mortgage on your home with an annual percentage rate of 7% at monthly payments (12 payments per year). You plan to refinance this mortgage with a new 30 year low at the current rate of 5%.

a. What is the monthly payment of the original mortgage.

b. How much do you still owe of the original principal after seven years? (Hint: for a loan that is amortized, like a mortgage, the amount you still owe at any time is the present value of the remaining payments that have not yet been made).

c. How much money can you borrow now at the new interest rate if you keep the same monthly payments as the original mortgage?

Solutions

Expert Solution

Calculation is shown below

Following shows the working

jeff jeffy answered 2 months ago
Next > < Previous

Related Solutions

Assume that 8 years ago you borrowed $200,000 as a 30-year mortgage on your home with...
Assume that 8 years ago you borrowed $200,000 as a 30-year mortgage on your home with an annual percentage rate of 7% at monthly payments (12 payments per year). You plan to refinance this mortgage with a new 30 year low at the current rate of 5%. a. What is the monthly payment of the original mortgage. b. How much do you still owe of the original principal after seven years? (Hint: for a loan that is amortized, like a...
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?
You purchased a home 6 years ago using a 4% 30-year mortgage with a monthly payment...
You purchased a home 6 years ago using a 4% 30-year mortgage with a monthly payment of $1072.25. Assuming you want to pay off your mortgage today, how much would you have to pay the lender in order to pay off the outstanding balance on your mortgage loan? Round to the nearest dollar.
The Frugals buy a home and assume a $190,000 30-year mortgage @ j (12) = 8...
The Frugals buy a home and assume a $190,000 30-year mortgage @ j (12) = 8 %. They decide to amortize the debt quicker, and they pay an extra $400 toward principal each month. How long will it take them to retire their mortgage? Assuming the Frugals continue to pay down their mortgage at the rate calculated just above, how much interest will they be able to write-off for income tax purposes in the 7 th year of their loan?...
The Frugals buy a home and assume a $190,000 30-year mortgage @ j (12) = 8...
The Frugals buy a home and assume a $190,000 30-year mortgage @ j (12) = 8 %. They decide to amortize the debt quicker, and they pay an extra $400 toward principal each month. How long will it take them to retire their mortgage?
Suppose you borrowed $200,000 for a home mortgage on January 1, 2015 with an annual interest...
Suppose you borrowed $200,000 for a home mortgage on January 1, 2015 with an annual interest rate of 6% per year. The balance on the mortgage is amortized over 30 years with equal monthly payments at the end of each month. (This means the unpaid balance on January 1, 2045 should be $0). a) What are the monthly payments? (b) How much interest was paid during the 30 years of the mortgage? (c) What is the unpaid balance on the...
Assume Sam borrowed $120,000 for a home mortgage, to be repaid at 8% interest over 3...
Assume Sam borrowed $120,000 for a home mortgage, to be repaid at 8% interest over 3 years with monthly payments. How many monthly payments does Sam has to pay for 3 year? How much is the monthly payment? How much is the interest payment for the third month? How much interest is paid over the life of the loan? Hint: Annual percentage rate (APR) = ?? Monthly discount rate (rate) = ?? Number of payment (Nper) = ?? Monthly payment...
You purchased your home 6 years ago. At this time, you took out a mortgage for...
You purchased your home 6 years ago. At this time, you took out a mortgage for $200,000, for 30 years, with a fixed rate of 5%. You have made all payments on time but have paid nothing extra on the mortgage. Suppose you sell the house for $210,000 and pay a 6% commission. How much money will you receive (or have to pay) after you pay off your loan? Solve using a financial calculator.
1. You need a 20-year, fixed-rate mortgage to buy a new home for $200,000. Your mortgage...
1. You need a 20-year, fixed-rate mortgage to buy a new home for $200,000. Your mortgage bank will lend you the money at a 7 percent APR for this 240-month loan. However, you can afford monthly payments of only $800, 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...
Suppose you currently have 25 years remaining on a mortgage that started as a $200,000, 30-year...
Suppose you currently have 25 years remaining on a mortgage that started as a $200,000, 30-year 6% mortgage. Your current balance is $186,108.71. Your current payment (including both principal and interest) is $1,199.10. Ignoring closing costs, evaluate whether you should refinance into a 30-year 5%mortgage or a 15-year 4% mortgage. Determine the following for both alternatives: a. What would be the new monthly payment assuming you refinance the existing balance of $186,108.71? b. What would be the total accumulated interest...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT