Assignment_4_RE410_2023

A borrower is purchasing a property for $180,000 and can choose between two possible loan alternatives. The first is a 90% loan for 25 years at 9% interest and 1 point and the second is a 95% loan for 25 years at 9.25% interest and 1 point. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money? O 12.01% O 14.34% 13.50% O 13.66%

K Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $160,000 loan. Option 1: a 30-year loan at an APR of 9%. Option 2: a 15-year loan at an APR of 8.5%. Find the monthly payment for each option. The monthly payment for option 1 is $ The monthly payment for option 2 is $ (Do not round until the final answer. Then round to the nearest cent as needed.) Find the total amount paid for each option. The total payment for option 1 is $ The total payment for option 2 is $ (Use the answers from the previous step to find this answer. Round to the nearest cent as needed.) Compare the two options. Which appears to be the better option? OA. Option 1 is the better option, but only if the borrower plans to stay in the same home for the entire term of the loan. OB. Option 1 will always be the better option.

K Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $110,000 loan. Option 1: a 30-year loan at an APR of 8.5%. Option 2: a 15-year loan at an APR of 8%. Find the monthly payment for each option. The monthly payment for option 1 is $ The monthly payment for option 2 is $ (Do not round until the final answer. Then round to the nearest cent as needed.)

Give typing answer with explanation and conclusion    Assume you want to borrow $300,000 and have been presented with two options. The first option is a fully amortizing loan with an interest rate of 3% and $4000 of origination fees and points. The second option is an interest only loan with an interest rate of 4% and $5000 of origination fees and points. Both loans are for 30 years and have monthly payments. Further assume that if the borrower chooses the interest only loan, any money saved on the monthly payment can be invested with a projected return of 7%. Also assume that the proceeds from the investment will first be used to pay off any remaining balance on the loan. How much money will the investor have left at the end of 30 years after repaying the loan?   Group of answer choices   None, the investor will owe $12,373.42   $323,060.72   $22,063.08   $30,750.78

You are considering the following fixed interest rate mortgage loan alternatives: Alternative 1: $180,000 initial loan balance 4.00% annual nominal interest rate 30-year amortization schedule $859.35 monthly loan payment Alternative 2: $195,000 initial loan balance 4.25% annual nominal interest rate 30-year amortization schedule $959.28 What is incremental cost of borrowing the additional $15,000?     (A) 0.58% --- Wrong (B) 4.25% (C) 5.8% --- Wrong (D) 7.01%

Assume you need a $87,000.00 loan for a home. Compute the monthly payment for each option. Assume that the loans are fixed rate and that closing costs are the same in both cases. Round to the nearest penny.Option 1: a 30 year-loan at an APR of 7.25%The monthly payment for Option 1 would be $.Option 2: a 15 year-loan at an APR of 6.5%The monthly payment for Option 2 would be $

Suppose that you have two loan choices with monthly payments Choice Loan Amount Term (years) Interest Rate 1 $ 250,000 30 5% 2 $ 220,000 30 4.50% (a) What is the incremental borrowing cost of $30,000 for loan 1 over loan 2 if you hold the loan for the entire term and there are no origination costs for the two loans? Incremental Borrowing Cost: $3,254.72 (b) What is the incremental borrowing cost of $30,000 for loan 1 over loan 2 if you hold the loan for only 6 years (72 months) and there are no origination costs for the two loans? Incremental Borrowing Cost: $650.94

A borrower is purchasing a property for $200,000 and can choose between two possible loan alternatives.  Loan A is a 90% loan for 25 years at 8% interest and 2 points and Loan B is a 95% loan for 25 years at 8.75% interest and 1 point. Assume the loans will be held to maturity, what is the incremental cost of borrowing the extra money? Assume that the loans will be repaid in 5 years.  What is the incremental cost of borrowing the extra money? Rework parts (a) and (b) assuming the lender is charging 3 points on Loan A and 2 point on Loan B.  What is the incremental cost of borrowing?

Your property has net operating income of 4,500,000. Assuming you value the property with a cap rate of 6.5%, what is the DSC ratio if the lender will lend up to 75% of value and the rate is 4.5% based on a monthly pay, 30 years, fully amortizing loan?   Group of answer choices   1.43   1.35   1.51   1.27

Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs.   You need a ​$160,000 loan. Option​ 1: a​ 30-year loan at an APR of 8​%. Option​ 2: a​ 15-year loan at an APR of 7.5​%.       Question content area bottom Part 1 Find the monthly payment for each option.   The monthly payment for option 1 is ​$enter your response here. The monthly payment for option 2 is ​$enter your response here. ​(Do not round until the final answer. Then round to the nearest cent as​ needed.)

Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $80,000 loan. Option 1: a 30-year loan at an APR of 8.15%. Option 2: a 15-year loan at an APR of 7.75%. Question content area bottom Part 1 Find the monthly payment for each option. The monthly payment for option 1 is $ enter your response here. The monthly payment for option 2 is $ enter your response here.

Compare the monthly payment and total payment for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs.   You need a ​$180,000 loan. Option​ 1: a​ 30-year loan at an APR of 7.5​%. Option​ 2: a​ 15-year loan at an APR of 6.5​%.       Question content area bottom Part 1 Find the monthly payment for each option.   The monthly payment for option 1 is ​$enter your response here. The monthly payment for option 2 is ​$enter your response here. ​(Do not round until the final answer. Then round to the nearest cent as​ needed.) Part 2 Find the total payment for each option.   The total payment for option 1 is ​$enter your response here. The total payment for option 2 is ​$enter your response here. ​(Round to the nearest cent as​ needed.) Part 3 Compare the two options. Which appears to be the better​ option?     A. Option 1 will always be the better option.   B. Option 1 is the better​ option, but only if the borrower…

Suppose you are buying your first home for $144,000, and you have $17,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.40% nominal interest rate, with the first payment due in one month. What will your monthly payments be? Group of answer choices $831.93 $857.64 $753.30 $714.27 $794.39

Q.Considering the following information, what is the net benefit if the borrower refinances the loan (benefit analysis)? Initial Loan balance: 600,000 Initial loan term: 30 years Current Loan interest: 5.25% Remaining term on current loan: 15 years New loan term: 15 years New loan interest: 2.75% Cost of refinancing: 5% of the loan amount Expected holding period: 7 years Using Excel

Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $170,000 loan. Option 1: a 30-year loan at an APR of 8.25% Option 2: a 15-year loan at an APR of 7.8% Find the monthly payment for each option. The monthly payment for option 1 is $ enter your response here. The monthly payment for option 2 is $ enter your response here. ( Do not round until the final answer. Then round to the nearest cent as needed.)

Question: 1.    Suppose you are interested in financing your new home purchase. You have your choice of a myriad financing options. You could enter into any one of the following agreements: 8% fixed rate for 7 years, 8.5% fixed rate for 15 years, 9% fixed for 30 years. In addition, you could finance with a 30-year variable rate that begins at 5% and increases and decreases with the prime rate, or you could finance with a 30-year variable rate that begins at 6% with ceilings of 2% per year to a maximum of 12% and no minimum. a.    Suppose you believe that interest rates are on the rise. If you want to completely eliminate your risk of rising interest rates for the longest period of time, which option should you choose? b.    Would you consider that hedging or insuring? Why c.    What does your risk-management decision “cost” you in terms of quoted interest rates during the first year?

5. you have a choice between the following two identical properties: property A is priced at $150,000 with 80% financing at a 10.5% interest rate for 20 years. Property B is priced at $160,000 with an assumable mortgage of $100,000 at 9 percent interest with 20 years remaining. Monthly payments are $899.73. A second mortgage for $20,000 can be obtained at 13 % interest for 20 years. all loans require monthly payments and are fully amortizing. 1. with no preference other than financing, which property would you choose?2. how would your answer change if the seller of property B provided at second mortgage fro $20,000 at the same 9% rate as the assumable loan?3. How would your answer change if the seller of property B provided a second mortgage for $30,000 at the same 9% rate as the assumable loan so that no additional down payment would be required by the buyer if the loan were assumed?

When purchasing a $210000 house, a borrower is comparing two loan alternative. The first loan is a 90% loan at 10.25% for 25 years. The second loan is an 85% loan for 9.75% over 15 years. Both have monthly payments and the property is expected to be held over the life of the loan. What is the incremental cost of borrowing the extra money? A. 20.25% B. 16.17% C. 11.36% D. 12.42% Please show all steps

You are considering two payment options on a $500,000 20-year mortgage having an interest rate of 2.8% compounded monthly. The first option is to make monthly payments at the start of each month, while the second option is to make payments at the end of each month. How much interest will be saved by choosing the first option? O a. $1,521.60 O b. $1,721.60 O c. $1,921.60 O d. $2,121.60 O e. $2,321.60

Amortization, Loan & InflationSuppose you take out a $100,000, 20- year mortgage loan to purchase a condo. The interest rate is 6%. Assume you make payments on the loan annually at the end of each year.a. What fraction of the initial loan payment is interest?b. What fraction of the initial loan is amortized? c. If the inflation rate is 2%, what are the real values of the first& last (year-end) payments?

Suppose you have taken out a $125,090 fully amortizing fixed rate mortgage loan that has a term of 15 years and an interest rate of 6%. After your first mortgage payment, how much of the original loan balance is remaining? Multiple Choice $1,054.82 $120,60378 $1245701 $124.875.56

A borrower is faced with choosing between two loans. Loan A is available for $76,000 at 6 percent interest for 30 years, with 6 points to be included in closing costs. Loan B would be made for the same amount, but for 7 percent interest for 30 years, with 2 points to be included in the closing costs. Both loans will be fully amortizing. Required: a. If the loan is repaid after 20 years, which loan would be the better choice? b. If the loan is repaid after five years, which loan is the better choice?

USE TVM SOLVER

show steps to calculation With screenshots of excel!!! As a borrower, you have the option to choose between two 30-year, monthly-payment loans: 7% interest rate with 3 points, versus 7.5% interest with one-half point. (a) Which loan option would you choose if you had a 10-year expected prepayment horizon? (b) Which would you choose if you expect to pay off this loan in 5 years?

Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $200,000 loan. Option 1: a 30-year loan at an APR of 7.5%. Option 2: a 15-year loan at an APR of 7%. Find the monthly payment for each option. The monthly payment for option 1 is S The monthly payment for option 2 is S (Do not round until the final answer. Then round to the nearest cent as needed.)

Considering the following information, what is the NPV if the borrower refinances the loan? Expected holding period: 3 years; current loan balance: $400,000; current loan interest: 5.875%; remaining term on current mortgage: 15 years; new loan interest: 3.625%; new loan term: 15 years; cost of refinancing: $6,000. Assume that the opportunity cost is 10%. Should the borrower refinance

need help with A only. The answer to B is 7.8%please help asap

Say you need to take out a loan for $1,500. There are two options for repayment: Option A: short-term 6% interest loan with a term of 1 year. Option B: 1-year simple interest amortized loan at 6% interest, with monthly payments.  What is the lump sum payment plan for option A? And what is the monthly payment for option B?  What formulas did you use and why?