2 Val has just purchased her first home. Her gross income is $6,000 a month and her GDS ratio is 30%. Non-mortgage costs per month are $600. Val's mortgage has a 3%, compounded semi-annually rate, with an amortization period of 25 years and monthly payments. If her home is valued at $350,000, which describes th type of mortgage has she? 1. Fixed-rate II. Variable-rate III. High-ratio IV. Conventional

2 Val has just purchased her first home. Her gross income is $6,000 a month and her GDS ratio is 30%. Non-mortgage costs per month are $600. Val's mortgage has a 3%, compounded semi-annually rate, with an amortization period of 25 years and monthly payments. If her home is valued at $350,000, which describes th type of mortgage has she? 1. Fixed-rate II. Variable-rate III. High-ratio IV. Conventional

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Ann Is buying a new home for $365,000. She is choosing between 2 loan options. Loan A is a 15-year mortgage at 5% annual interest with a $25,000 down payment and $2688.70 monthly payment. Loan B is a 30-year mortgage at 4% annual interest with a $10,000 down payment and a $1694.82 monthly payment. Which loan has the lowest total cost? a Loan A is lower cost as it is approximately $111,170 less expensive than Loan B. b Loan B is approximately $87,235 less expensive than Loan A. c Loan B is approximately $52,379 less expensive than Loan A. d Loan A is approximately $102,473 less expensive than Loan B.
Andy Reid wants to buy a new home that costs $375,000. He can borrow money from the bank at an interest rate of 6.8% compounded monthly. The mortgage is for 30 years and requires monthly payments. What is Andy's monthly mortgage payment? Multiple Choice O $2,811.43 $2.44472 $1,041.67
15. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You've decided to buy a house that is valued at $1 million. You have $300,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $700,000 mortgage, and is offering a standard 30-year mortgage at a 12% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate in percentage form to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a…
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Justin and Hayley are interested in a fixed-rate mortgage for $450,000. They are undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 3.5% for the 15-year mortgage, and 3.85% for the 30-year mortgage (a) What are the monthly principal and interest payments for EACH loan? (b) What is the total amount of interest paid on EACH loan? (c) Overall, how much more interest is paid by choosing the 30-year mortgage?
Please Do both questions Edie wants to borrow $325,000 to purchase a new condominium in New York. What are her monthly payments for a fully amortizing 30-year fixed rate mortgage with a 4.5% contract rate? Ans:___ what are her monthly payments for a partially amortizing 25-year fixed rate mortgage with a 4.5% contract rate and 5-year maturity? Ans:___
K Erin took out a 15-year mortgage with an annual interest rate of 6% to purchase a house for $220,000 with a down payment of $20,000. Find the amount of the monthly payment needed to amortize this loan. The amount of the monthly payment needed to amortize this loan is $1687.71 (Round to the nearest cent as needed.)
Willie just bought a home and financed his purchase with a $1,000,000 6% 20- year mortgage. (a) What is Willie's monthly mortgage payment? (b) What will be the balance on Willie's mortgage after 12 years? 1. How did you get the monthly mortgage payment of $7,164.31? 2. How did you get the balance of $545,169.90 after 12 years?
3. Ann obtains a fully amortizing 30-year Fixed Rate Mortgage with monthly payments for the $1,500,000 at 7.05%. How much does Ann need to pay monthly? ( Explain well with proper step by step answer) .
K The Nicols are buying a house selling for $345,000. They pay a down payment of $45,000 from the sale of their current house. To obtain a 20-year mortgage at a 4.5% interest rate, the Nicols must pay 2.5 points at the time of closing a) What is the amount of the mortgage? b) What is the cost of the 2.5 points? a) The amount of the mortgage is $ b) The cost of the 2.5 points on the mortgage is S C***
A couple decides to switch from monthly to accelerated weekly payments on their 20-year $250,000 5% fixed-rate mortgage. How much total interest would they save? Round to the nearest dollar. a) $15,560 b) $20,793 c) $21,499 d) $24,872

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