Question
In: Finance
You would like to borrow $245,000 using a 30-year, 1-year ARM indexed to the 1- year...
You would like to borrow $245,000 using a 30-year, 1-year ARM indexed to the 1- year Treasury security with a 2.75 percent margin and 2/6 caps (2 percent per year and 6 percent lifetime). The initial interest rate on this loan is 2.75 percent. The lender is charging you 1.50 points and $1,200 in miscellaneous fees to close the loan.
a) What is the initial payment on this mortgage?
b) If the 1-year Treasury security is yielding 2.25 percent at the first adjustment date, what is your payment on this loan during the second year?
c) Suppose that the 1-year Treasury is yielding 2.75 percent at the second adjustment date. What is the new payment on this loan during the third year?
d) Assuming that you pay of the loan at the end of the third year, what yield did the lender earn on this loan?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Suppose that you are considering a loan in which you will borrow $245,000 using a 30-year...
Suppose that you are considering a loan in which you will borrow
$245,000 using a 30-year loan. The loan has an annual interest rate
of 6% with monthly payments and monthly compounding. Suppose also
that the lender is charging you a 0.75% origination fee, you are
paying 2.25 points in order to get the 6% interest rate, and the
loan has $1,275 in third-party closing costs associated with
it.
a. What will the effective borrowing cost be for this loan...
Suppose that you are considering a loan in which you will borrow $245,000 using a 30-year...
Suppose that you are considering a loan in which you will borrow
$245,000 using a 30-year loan. The loan has an annual interest rate
of 6% with monthly payments and monthly compounding. Suppose also
that the lender is charging you a 0.75% origination fee, you are
paying 2.25 points in order to get the 6% interest rate, and the
loan has $1,275 in third-party closing costs associated with
it.
*** I NEED TO KNOW HOW TO SOLVE THIS ON A...
3. Suppose that you are considering a loan in which you will borrow $245,000 using a...
3. Suppose that you are considering a loan in which you will
borrow $245,000 using a 30-year loan. The loan has an annual
interest rate of 6% with monthly payments and monthly compounding.
Suppose also that the lender is charging you a 0.75% origination
fee, you are paying 2.25 points in order to get the 6% interest
rate, and the loan has $1,275 in third-party closing costs
associated with it.
a. What will the effective borrowing cost be for this...
You borrow $245,000; the annual loan payments are $23,847.41 for 30 years. What interest rate are...
You borrow $245,000; the annual loan payments are $23,847.41 for
30 years. What interest rate are you being charged? Round your
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You have are in the 5th year of a $300,000 5/1, 30 year ARM with caps...
You have are in the 5th year of a $300,000 5/1, 30 year ARM with
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2.5% + margin of 2%). Your current monthly payments of P+I equal
$1,520.06. By the end of Year 5, interest rates have increased
substantially and the "index" is now at 6.5%. What will your new
monthly payment be for Year 6. [Hint: find the loan principal
amount then recast for remaining 25 years...
You borrow $675,000 to buy a home using a 30-year mortgage with an interest rate of...
You borrow $675,000 to buy a home using a 30-year mortgage with
an interest rate of 3.675 percent and monthly payment. Calculate
the interest portion of the 20th payment. Disregard property taxes
and mortgage insurance.
Group of answer choices
$2,006
$1,999
$2,002
$1,818
$1,821
You borrow $325,000 to buy a home using a 30-year mortgage with an interest rate of...
You borrow $325,000 to buy a home using a 30-year mortgage with
an interest rate of 3.75 percent and monthly payment. Calculate the
monthly payment amount. Disregard property taxes and mortgage
insurance.
Group of answer choices
$1,505.13
$1,489.25
$1,417.08
$1,572.46
This morning, you took out a loan of $386,000 to purchase a
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You want to buy a house and will need to borrow $245,000. The interest rate on...
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Richard would like to borrow Sh. 114,000 using an adjustable-rate mortgage instrument with 15-year amortization schedule,...
Richard would like to borrow Sh. 114,000 using an
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1. Dell Computers would like to borrow pounds, and Virgin Airlines wants to borrow dollars. Because...
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