Question

In: Finance

You take out a 30-year $450,000 mortgage loan with an APR of 7.75 percent and monthly...

You take out a 30-year $450,000 mortgage loan with an APR of 7.75 percent and monthly payments. In 16 years, you decide to sell your house and payoff the mortgage. What is your monthly payment? What is the principal balance on the loan? What is your total payment? What is your principal payment? What is your interest payment?

Expert Solution

APR = 7.75 % p.a.

Effective interest rate period = Monthly

Efective Interest rate / Month = 7.75% / 12 = 0.6465%/ month

Total number of payments = 30 x 12 = 360 ( 12 payments / year)

Assuming monthly payment = M

4,50,000 = M x [ 1 - (1+0.6465%)^-360]/0.6465%

450,000 = M x 139.5844

M = 450,000/139,5844 = 3223.86 ( Monthly payment)

------------------------------------------------------

Principla Amount = 4,50,000 which is fixed. However this balance amount is changing after each period.

-----------------------------------------------------

Total payment = 3223.86 x 360 = 11,60,587.84

-----------------------------------------------------------

Principle payment = 450,000

---------------------------------------------------------

Interest pament = 11,60,587.84 - 450,000 = 7,10,587.84

--------------------------------------------------------

Please provide feedback on final ans.........Plz get back for question, clarification...........All the best

jeff jeffy answered 2 years ago

You take out a 30-year $200,000 mortgage loan with an APR (monthly) of 4.5% and monthly...

You take out a 30-year $200,000 mortgage loan with an APR (monthly) of 4.5% and monthly payments. In 12 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?

You take out a $450,000 30-year mortgage that has a 3.67% annualinterest rate and your...

You take out a $450,000 30-year mortgage that has a 3.67% annual interest rate and your annual payments on the loan are $25,000. How much of your payment was allocated to principal in year 5?How much of your payment was allocated to interest in year 3?

You have the option to take out a 30-year mortgage that has an APR of 4.9%...

You have the option to take out a 30-year mortgage that has an APR of 4.9% or a 20-year mortgage that has an APR of 4.15%. When answering the following questions, remember to base your mortgage payments on the amount you need to borrow rather than the entire purchase price. 30-year mortgage If you take out a 30-year mortgage with an APR of 4.9%, what will your monthly payment be? (Round your answer to the nearest cent.) $ If you...

You take out a $250,000 30 year mortgage with monthly payments and a rate of 10%,...

You take out a $250,000 30 year mortgage with monthly payments and a rate of 10%, monthly compounded. What will your mortgage balance be after your first year of making your monthly payments? How much total interest you paid on this mortgage? work out on a financial calculator. explain the steps to take please.

Suppose that you take out a 30-year mortgage loan of $200,000 at an interest rate of...

Suppose that you take out a 30-year mortgage loan of $200,000 at an interest rate of 10%. What is your total monthly payment? How much of the first month’s payment goes to reduce the size of the loan? If you can afford to pay $2,000 per month, how long would it take you to pay for this loan (still at 10% interest)? If you can only pay $1,700 per month, and still want to finish paying in 30 years, what...

You plan to take out a $700,000 mortgage for 30 years with monthly payments. If you...

You plan to take out a $700,000 mortgage for 30 years with monthly payments. If you don’t have a down payment, they will offer you an interest rate of 5.7%. If you can make a down payment of at least $20,000 they will lower the interest rate to 5.2%. Calculate the monthly payment for each loan. You would like to see how long it will take you to come up with a down payment. You already have $6,000 and can...

Suppose that you take out a mortgage loan with the following characteristics: compounding period is monthly...

Suppose that you take out a mortgage loan with the following characteristics: compounding period is monthly loan is for $250,000 APR = 6% life of loan for the purpose of calculating the mortgage payments is 30 years the loan requires a balloon payment of the balance of the principal owed at the end of year 5, i.e., the balance owed immediately after the 60th payment. What is the size of the balloon payment? Do not round at intermediate steps in...

suppose you take a mortgage for $95,000 at 6.50% for 30 years, monthly payments. the loan...

suppose you take a mortgage for $95,000 at 6.50% for 30 years, monthly payments. the loan has a 5% prepayment penalty if the loan is repaid within the first 5 years of life. if you repay the loan at the end of year 4 what is the payoff of the loan? A- 0 B- 4,515 C- 90,307 D-156,250 You to refinance your current mortgage that has a current balance of $150,000 and does not have a prepayment penalty. Your lender...

To buy a $160,000house, you take out a 6% (APR compounded monthly) mortgage for $130,000. Five...

To buy a $160,000house, you take out a 6% (APR compounded monthly) mortgage for $130,000. Five years later, you sell the house for $195,000 (after all other selling expenses). What equity (the amount that you can keep before tax) would you realize with a 30-year repayment term? Note: For tax purpose, do not consider the time value of money on $30,000 down payment made five years ago. The realized equity will be $____ thousand?

A borrower takes out a 30-year adjustable rate mortgage loan for $325,000 with monthly payments.

A borrower takes out a 30-year adjustable rate mortgage loan for $325,000 with monthly payments. The first two years of the loan have a "teaser" rate of 4%, after that, the rate can reset with a 5% annual payment cap. On the reset date, the composite rate is 6%. Assume that the loan allows for negative amortization. What would be the outstanding balance on the loan at the end of Year 3?