A mortgage broker is offering a 25-year $270,000 mortgage with a teaser rate. In the first...

A mortgage broker is offering a 25-year $270,000 mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 3.6 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 6.6 percent APR.

1) What are the monthly payments in the first two years?

2) What are the monthly payments after the second year?

P.s. Previous expert answered 1) 1,366.221 - and it was correct answer;

2) 1,823.38 (if you round it down to 2 decimal) - and this was an INCORRECT answer.

Please HELP!!!

Expert Solution

	Monthly rate(M)=	yearly rate/12=	0.55%	Monthly payment=	1806.55
Month	Beginning balance (A)	Monthly payment	Interest = M*A	Principal paid	Ending balance
1	256180.19	1806.55	1408.99	397.55	255782.64
2	255782.64	1806.55	1406.80	399.74	255382.90
3	255382.90	1806.55	1404.61	401.94	254980.96
4	254980.96	1806.55	1402.40	404.15	254576.81
5	254576.81	1806.55	1400.17	406.37	254170.44
6	254170.44	1806.55	1397.94	408.61	253761.83
7	253761.83	1806.55	1395.69	410.85	253350.97
8	253350.97	1806.55	1393.43	413.11	252937.86
9	252937.86	1806.55	1391.16	415.39	252522.47
10	252522.47	1806.55	1388.87	417.67	252104.80
11	252104.80	1806.55	1386.58	419.97	251684.83
12	251684.83	1806.55	1384.27	422.28	251262.55
13	251262.55	1806.55	1381.94	424.60	250837.95
14	250837.95	1806.55	1379.61	426.94	250411.02
15	250411.02	1806.55	1377.26	429.28	249981.73
16	249981.73	1806.55	1374.90	431.65	249550.09
17	249550.09	1806.55	1372.53	434.02	249116.07
18	249116.07	1806.55	1370.14	436.41	248679.66
19	248679.66	1806.55	1367.74	438.81	248240.85
20	248240.85	1806.55	1365.32	441.22	247799.63
21	247799.63	1806.55	1362.90	443.65	247355.98
22	247355.98	1806.55	1360.46	446.09	246909.90
23	246909.90	1806.55	1358.00	448.54	246461.36
24	246461.36	1806.55	1355.54	451.01	246010.35
25	246010.35	1806.55	1353.06	453.49	245556.86
26	245556.86	1806.55	1350.56	455.98	245100.88
27	245100.88	1806.55	1348.05	458.49	244642.39
28	244642.39	1806.55	1345.53	461.01	244181.38
29	244181.38	1806.55	1343.00	463.55	243717.83
30	243717.83	1806.55	1340.45	466.10	243251.73
31	243251.73	1806.55	1337.88	468.66	242783.07
32	242783.07	1806.55	1335.31	471.24	242311.83
33	242311.83	1806.55	1332.72	473.83	241838.00
34	241838.00	1806.55	1330.11	476.44	241361.57
35	241361.57	1806.55	1327.49	479.06	240882.51
36	240882.51	1806.55	1324.85	481.69	240400.82
37	240400.82	1806.55	1322.20	484.34	239916.48
38	239916.48	1806.55	1319.54	487.00	239429.48
39	239429.48	1806.55	1316.86	489.68	238939.79
40	238939.79	1806.55	1314.17	492.38	238447.42
41	238447.42	1806.55	1311.46	495.08	237952.33
42	237952.33	1806.55	1308.74	497.81	237454.52
43	237454.52	1806.55	1306.00	500.55	236953.98
44	236953.98	1806.55	1303.25	503.30	236450.68
45	236450.68	1806.55	1300.48	506.07	235944.62
46	235944.62	1806.55	1297.70	508.85	235435.77
47	235435.77	1806.55	1294.90	511.65	234924.12
48	234924.12	1806.55	1292.08	514.46	234409.65
49	234409.65	1806.55	1289.25	517.29	233892.36
50	233892.36	1806.55	1286.41	520.14	233372.23
51	233372.23	1806.55	1283.55	523.00	232849.23
52	232849.23	1806.55	1280.67	525.87	232323.35
. . .
246	51359.38	1806.55	282.48	1524.07	49835.31
247	49835.31	1806.55	274.09	1532.45	48302.86
248	48302.86	1806.55	265.67	1540.88	46761.98
249	46761.98	1806.55	257.19	1549.35	45212.63
250	45212.63	1806.55	248.67	1557.88	43654.75
251	43654.75	1806.55	240.10	1566.44	42088.31
252	42088.31	1806.55	231.49	1575.06	40513.25
253	40513.25	1806.55	222.82	1583.72	38929.53
254	38929.53	1806.55	214.11	1592.43	37337.09
255	37337.09	1806.55	205.35	1601.19	35735.90
256	35735.90	1806.55	196.55	1610.00	34125.91
257	34125.91	1806.55	187.69	1618.85	32507.05
258	32507.05	1806.55	178.79	1627.76	30879.30
259	30879.30	1806.55	169.84	1636.71	29242.59
260	29242.59	1806.55	160.83	1645.71	27596.88
261	27596.88	1806.55	151.78	1654.76	25942.12
262	25942.12	1806.55	142.68	1663.86	24278.25
263	24278.25	1806.55	133.53	1673.01	22605.24
264	22605.24	1806.55	124.33	1682.22	20923.02
265	20923.02	1806.55	115.08	1691.47	19231.55
266	19231.55	1806.55	105.77	1700.77	17530.78
267	17530.78	1806.55	96.42	1710.13	15820.66
268	15820.66	1806.55	87.01	1719.53	14101.12
269	14101.12	1806.55	77.56	1728.99	12372.14
270	12372.14	1806.55	68.05	1738.50	10633.64
271	10633.64	1806.55	58.49	1748.06	8885.58
272	8885.58	1806.55	48.87	1757.67	7127.90
273	7127.90	1806.55	39.20	1767.34	5360.56
274	5360.56	1806.55	29.48	1777.06	3583.50
275	3583.50	1806.55	19.71	1786.84	1796.66
276	1796.66	1806.55	9.88	1796.66	0.00

jeff jeffy answered 1 year ago

Teaser Rate Mortgage A mortgage broker is offering a 30-year mortgage with a teaser rate. In...

Teaser Rate Mortgage A mortgage broker is offering a 30-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 5.6 percent APR interest rate. After the second year, the mortgage interest charged increases to 9.2 percent APR. What is the effective interest rate in the first two years? What is the effective interest rate after the second year? 5.60%, 9.20% respectively 5.75%, 9.60% respectively 5.49%, 8.92% respectively 13.19%,...

A mortgage broker is offering a $281,000 20-year mortgage with a teaser rate. In the first...

A mortgage broker is offering a $281,000 20-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 4.7 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 7.7 percent APR. What are the monthly payments in the first two years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Monthly payment $ What are the...

A mortgage broker is offering a $284,000 20-year mortgage with a teaser rate. In the first...

A mortgage broker is offering a $284,000 20-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 5.0 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 8.0 percent APR. What are the monthly payments in the first two years? What are the monthly payments after the second year

A mortgage broker is offering a 30 year $271,000 mortgage with a teaser rate in the...

A mortgage broker is offering a 30 year $271,000 mortgage with a teaser rate in the first two years of the mortgage the borrower makes monthly payments on only 3.7% APR interest rate. After the second year, the mortgage interest rate charged increase to 6.7% APR What are the monthly payments in the first two years? Do not round intermediate calculations and round your final answer to 2 decimal places. What are the monthly payments after the second year? Do...

Problem 5-55 Teaser Rate Mortgage (LG5-9) A mortgage broker is offering a 25-year $180,900 mortgage with...

Problem 5-55 Teaser Rate Mortgage (LG5-9) A mortgage broker is offering a 25-year $180,900 mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 3.7 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 6.7 percent APR. What are the monthly payments in the first two years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) What are...

A 30-year variable-rate mortgage offers a first-year teaser rate of 2%. After that, the rate starts...

A 30-year variable-rate mortgage offers a first-year teaser rate of 2%. After that, the rate starts at 4.5%, adjusted based on actual interest rates. The maximum rate over the life of the loan is 10.5%, and the rate can increase by no more than 200 basis points a year. If the mortgage is for $250,000, what is the monthly payment during the first year? Second year? What is the maximum payment during the fourth year? What is the maximum payment...

You have taken out a $100,000, one-year ARM. The teaser rate in the first year is...

You have taken out a $100,000, one-year ARM. The teaser rate in the first year is 4.5% (annual). The index interest rate after the first year is 3.25% and the margin is 2.75%. (Note: The term on this ARM is 30 years). There is also a periodic (annual) rate cap of 1.00%. Given this information, determine the monthly mortgage payment you would be scheduled to make in month 13 of the mortgage loan's term. A) $321.64 B) $566.26 C) $506.69...

You have taken out a $250,000, one-year ARM. The teaser rate in the first year is...

You have taken out a $250,000, one-year ARM. The teaser rate in the first year is 3.75% (annual). The index interest rate after the first year is 2.75% and the margin is 2.50%. (Note: The term on this ARM is 30 years). There is also a periodic (annual) rate cap of 2.00%. Given this information, determine the monthly mortgage payment you would be scheduled to make in month 13 of the mortgage loan's term.

A homeowner took out a 25-year, fixed-rate mortgage of $210,000. The mortgage was taken out 8...

A homeowner took out a 25-year, fixed-rate mortgage of $210,000. The mortgage was taken out 8 years ago at a rate of 7.1 percent. If the homeowner refinances, the charges will be $3,400. What is the highest interest rate at which it would be beneficial to refinance the mortgage? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) APR% _____

You are looking to finance your home. The bank is offering a three-year ARM (adjustable-rate mortgage)...

You are looking to finance your home. The bank is offering a three-year ARM (adjustable-rate mortgage) with an introductory rate of 3.40%. It has an adjustment cap of 3.00% per adjustment period with a lifetime adjustment of 8.00%. The rate is 4.00% over the one-year LIBOR rate which is currently 1.25%. What will your interest rate be after three years if the LIBOR rate does not change? (Round your answer to 2 decimal places.) In three years, what is the...

Question