Question

In: Finance

You are looking at buying a house with a $180,000 loan amount. You have 2 options...

You are looking at buying a house with a $180,000 loan amount. You have 2 options for this loan: 1) 15 Year Loan, you can get a monthly interest rate of 0.3% monthly. A) What is your monthly payment? B) What is the total amount you would pay out of pocket over the life of the loan? C) How much interest have you paid?

2) 30 year Loan, you can get a monthly interest rate of 0.3125% monthly. A) What is your monthly payment? B) What is the total amount you would pay over the life of the loan? C) How much interest have you paid?

Please do on excel and show formula/calculations

Solutions

Expert Solution

Calculation is shown below

Working is given below


Related Solutions

The Young household is looking at buying a house. The three houses they are looking at...
The Young household is looking at buying a house. The three houses they are looking at cost the following: $160,000, $190,000 and $210,000. They can pay up to $900 in monthly mortgage payments. They currently have $18,000 set aside for a down payment. Similarly to the Tremblay’s bank, the Youngs’ bank will add $40 to each mortgage payment if they put less than 20% down and an additional fee of $30 more to each payment if they put less than...
You are buying a house and trying to decide how to structure a the loan.
You are buying a house and trying to decide how to structure a the loan. You can borrow $120,000 at a 4.5 percent rate for 30 years with monthly payments, or you can borrow $120,000 at a 3.75 rate for 20 years with monthly payments. what should you consider when making this decision?
You are buying a house and trying to decide how to structure the loan. You can...
You are buying a house and trying to decide how to structure the loan. You can borrow $120,000 at a 4.5% rate for 30 years with monthly payments, or you can borrow $120,000 at a 3.75% rate for 20 years with monthly payments. What should you consider when making this decision?
6. Jim has an annual income of $180,000. Jim is looking to buy a house with...
6. Jim has an annual income of $180,000. Jim is looking to buy a house with monthly property taxes of $140 and monthly homeowner’s insurance of $70. Jim has $178 in monthly student loan payments. Apple bank has a maximum front end DTI limit of 28% and a maximum back end DTI limit of 36%. Both limits must be satisfied. Apple bank is offering a fully amortizing 30 year FRM at an annual rate of 4.5%, with monthly payments, compounded...
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 are buying a new house on a 30-year, 5.2% mortgage loan of $230,000. A) How...
You are buying a new house on a 30-year, 5.2% mortgage loan of $230,000. A) How much will your monthly payments be? B) How much will go toward principal in the 75th month? How much will go toward interest in the 75th month? What will be the balance after 75 months? C) How much interest will you pay in total over the 30 years? D) If you do a 15-year loan instead of a 30-year one, how much will you...
You are buying a new house on a 30-year, 6.2% mortgage loan of $230,000. A. How...
You are buying a new house on a 30-year, 6.2% mortgage loan of $230,000. A. How much will your monthly payments be? B. How much will go toward principal in the 55th month? How much will go toward interest in the 55th month? What will be the balance after 55 months? C. How much interest will you pay in total over the 30 years? D. If you do a 15-year loan instead of a 30-year one, how much will you...
You are a MNC looking at buying a company in England. You have determined that the...
You are a MNC looking at buying a company in England. You have determined that the free cash flow is $150 Million growing at 9% each year. How much would you pay for this company? You will have to use the Capital Asset Pricing Model (CAPM), determine the Weighted Average Cost of Capital (WACC) and then discount the free cash flows that you will determine after applying the growth For the MNC: For England: •The Tax rate is determined by...
When you bought your current house, you obtained a loan in the amount of $185,000, with...
When you bought your current house, you obtained a loan in the amount of $185,000, with a 30-year term and an interest rate of 6.35%. That was 6 years ago, and you notice that mortgage rates have fallen significantly. Your banker has given you two refinancing alternatives. Alternative 1 is a 25 year loan with a fixed rate of 4.75%. This option requires a 2-point rate buy-down fee and closing costs of $1,700. Alternative 2 is a 25 year loan...
Suppose that you are purchasing a house (loan amount = $200,000) and inquire about the terms...
Suppose that you are purchasing a house (loan amount = $200,000) and inquire about the terms for a 30-year fixed-rate mortgage. LOAN A: annual interest rate of 3.75% with monthly payments and compounding no discount points origination fee of 0.75% $928 in third-party closing costs What is the Effective Borrowing Cost for loan A assuming no prepayment? What is the EBC for the loan if we prepay at the end of the third year?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT