You are interested in purchasing the Malibu home (sale price of $12,000,000, mortgage rate of 3.955%,...

You are interested in purchasing the Malibu home (sale price of $12,000,000, mortgage rate of 3.955%, 30% down payment, 30 year fixed mortgage). How much principal would you pay [ Select ] ["$25,646", "$12,240", "$25,158", "$12,816"] during month 2? How much would your monthly payment go up today [ Select ] ["$4,428", "$4,977", "$10,428", "$3,428"] if interest rates went up 1% annually today?

Expert Solution

Given, Price =$12,000,000 and Down payment= 30%.

Therefore, Loan amount= Price*(1- Down payment)= $12,000,000*0.7= $8,400,000

Monthly payment of the loan with interest at 3.955% = $ 39,885.27 as follows:

Principal paid in 2^nd month= $12,240.48 as shown in the relevant portion of amortization schedule below:

The answer is second option given.

If interest rate went up 1%, monthly payments will be $ 44,862.28 as follows:

Increase in monthly payments= 44,862.28- 39,885.27 = $ 4,977.01

The answer is second option given.

jeff jeffy answered 1 year ago

‘A Home For You’ is a company that provides financing for purchasing a home. All mortgage...

‘A Home For You’ is a company that provides financing for purchasing a home. All mortgage applicants must first be approved. All approved applicants are then required to make a deposit on the home loan to cover the various applicable fees. The following information is entered for each applicant:  name  loan amount  age (A valid age is between 18 and 55 inclusive)  monthly income (monthly income > 0 )  credit rating ('G' for good and...

You are considering purchasing a home that requires $300,000 mortgage at 5.25%. The payment on the...

You are considering purchasing a home that requires $300,000 mortgage at 5.25%. The payment on the 30 year mortgage for this amount is $1656.61 per month, the payment for a 15 year maturity is $2411.63 per month. A) What is the total amount that you would pay for the 30 year mortgage, including interest? B) What is the total amount that you would pay for the 15 year mortgage, including interest? C) What is the difference in the total interest...

Mortgage interest rates and home prices 30-year mortgage rates year interest rate (%) Median home price...

Mortgage interest rates and home prices 30-year mortgage rates year interest rate (%) Median home price 1988 10.30 183,800 1989 10.30 183,200 1990 10.10 176,900 1991 9.30 173,500 1992 8.40 172,900 1993 7.30 173,200 1994 8.40 173,200 1995 7.90 169,700 1996 7.60 174,500 1997 7.60 177,900 1998 6.90 188,100 1999 7.40 203,200 2000 8.10 230,200 2001 7.00 258,200 2002 6.50 309,800 2003 5.50 329,800 1. Generate two separate scatter plots, following the requirements below, with the data provide. a. year...

You are purchasing a single family home for $374,000. Your mortgage company is offering you a...

You are purchasing a single family home for $374,000. Your mortgage company is offering you a rate of 4.15% compounded monthly for a term of 30 years. Use a TVM Calculator to determine your monthly payment. Please show the values you entered into the TVM Calculator. Present Value = Payments = Future Value = Annual Rate% = Periods = Compounding =

You are purchasing a new home and need to borrow $325,000 from a mortgage lender. The...

You are purchasing a new home and need to borrow $325,000 from a mortgage lender. The lender quotes a rate of 6.5% APR for a 30-year fixed rate mortgage (with payments made at the end of each month). The lender offers you the option to "buy down" the interest rate. If you pay 1 point, the interest rate will be reduced to 6.25% APR for a 30year fixed rate mortgage. One point is equal to 1% of the loan value....

You and your spouse are considering purchasing a home. The home you are purchasing is $231,250....

You and your spouse are considering purchasing a home. The home you are purchasing is $231,250. You plan on offering full price today. You have a 10% down payment and your are financing the remaining balance for 30 years. (Round off the amount you are financing to nearest dollar.) You have checked with several lenders and find the best rate to be 4.5% for 30 years. In order to qualify for the loan the lender tells you that your front...

You are interested in purchasing a $400,000 home. Interest rates are currently about 4.0% for 30...

You are interested in purchasing a $400,000 home. Interest rates are currently about 4.0% for 30 year loan. Ignoring taxes, insurance, and any possible mortgage insurance, if you put down 5%, what will your payment be? If you choose a 15 year mortgage instead, the interest rate will be 3.5%. What will your payment be with the 15 mortgage?

Kim Buyer is purchasing a home. The purchase price for the home is $125,000. Kim is...

Kim Buyer is purchasing a home. The purchase price for the home is $125,000. Kim is obtaining a loan from Acme Loan Company for $105,000. What is the amount of title insurance that Kim can purchase. What is the amount of title insurance that Acme Loan Company can purchase? and why.

You need a 22-year, fixed rate mortgage to buy a new home for $290,000. Your mortgage...

You need a 22-year, fixed rate mortgage to buy a new home for $290,000. Your mortgage bank will lend you the money at an annual interest rate of 6.5% APR and annual compounding. What is your annual payment?

You need a 30-year, fixed-rate mortgage to buy a new home for $290,000. Your mortgage bank...

You need a 30-year, fixed-rate mortgage to buy a new home for $290,000. Your mortgage bank will lend you the money at a 5.85% APR (semi-annual) for this 360-month loan. However, you can afford monthly payments of only $1,300, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at...

Question