A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them upto 70% of their equity. They puchased their home 12 years ago for $70,525. The home was financed by paying 10%down and signing a 30-year mortgage at 9.3% on the unpaid balance. Equal monthly payments were made toamortize the loan over the 30-year period. The net market value of the house is now $100,000. After making their144th payment, they applied to the loan company for the maximum loan. How much (to the nearestthey receive?dollar) willAmount of loan: $(Round to the nearest dollar.)

3. Loan balance after 144 payments (Important Note: This might require additional information or…

Answered: A couple wishes to borrow money using…

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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A couple wants to purchase a $170,000 house, and they have enough saved for a 5% down payment and money for other closing costs. The bank is offering a 30-year mortgage at 5.35% interest, compounded monthly. The couple has an annual after-tax income of $85,000 and other debts totaling $850 per month. Because their down payment is less than 20%, they are required to pay for private mortgage insurance, which costs 1% of the loan amount each year.(a) If the maximum debt-to-income ratio (total monthly debt divided by after-tax monthly income) is 43%, can the couple afford to purchase the home? (b) If the couple lives in the house for 30 years, what is the total amount paid for the house, including down payment, principal, interest, and private mortgage insurance?
three years ago , the Kennedys purchased a house and took out a mortgage of $ 1,000,000 from the HSBC bank. They amortized the mortgage over 25 years at 2.79\% compounded semi - annually for a 3 year term. The bank calculated their monthly payment should be $ 4,626. How much would the final payment be assuming the same interest rate over the 25 years ?
A couple bought a business to rent apartments near St Clair's College in North York. They purchased it for $800,000. They made a down payment of 30% of the value of the rental business and received the rest of the purchase price in a 25-years amortized mortgage from Royal Bank Canada. The interest rate was 5.80% compounded semi-annually and the payments were at the end of each month. The interest rate was fixed for a 3-year term. a) What is the amount of down payment? What was the amount left to be amortized over the 25 years? b) How many payments are there over the 25-year amortization? c) What would be the monthly periodic interest rate be? d) Calculate the monthly payment amount.
The Dexter’s decided to purchase a new home. The purchase price of their new home was $345,990. The Dexter’s had a down payment of 20% due to the equity in their first home. They financed the rest at a fixed rate of 3.85% for 15 years. What is their monthly payment?
Please help me correctly. Theresa and Raul purchased a house 10 years ago for $220,000. They made a down payment of 20% of the purchase price and secured a 30 year conventional home mortgage at 4.5% per year compounded monthly on the unpaid balance. The house is now worth $280,000. How much equity do Teresa and Raul have in their house now?.
Five years ago, Diane secured a bank loan of $390,000 to help finance the purchase of a loft in the San Francisco Bay area. The term of the mortgage was 30 years, and the interest rate was 7%/year compounded monthly on the unpaid balance. Because the interest rate for a conventional 30-year home mortgage has now dropped to 5.5%/year compounded monthly, Diane is thinking of refinancing her property. (Round your answers to the nearest cent.) (a) What is Diane's current monthly mortgage payment? (b) What is Diane's current outstanding principal? (c) If Diane decides to refinance her property by securing a 30-year home mortgage loan in the amount of the current outstanding principal at the prevailing interest rate of 5.5%/year compounded monthly, what will be her monthly mortgage payment? (d) How much less will Diane's monthly mortgage payment be if she refinances?
When Florio and Rhoda bought their home, they borrowed $200,000 for 30 years at 6%, compounded monthly. After making 120 payments of $1199 per month, they plan to refinance. They find that they can refinance at 4.5%, compounded monthly, for 15 years. There is a one-time refinancing charge of $750, added to the amount of the refinanced loan. a) Find the Payoff Amount (Unpaid Balance) of Florio and Rhoda's Original Loan. 11a)_ b) Find the amount of their new loan (amount refinanced) 11b)_ c) Find their New Monthly Payment amount for the refinanced loan. 11c). d) Find the amount they saved by refinancing...if any! 11d).
Twelve years ago you financed your $93,000 house with monthly payments on a twenty-yearmortgage loan with interest charged at 6.25% compounded monthly. Your realtor says the currentnet market value of the home is $102,000. What is your equity in the house?
A husband and wife buy a new home and take out a $100000 mortgage loan with level annual payments at the end of each year for 15 years on which the effective rate of interest is equal to 5.5%. At the end of 5 years they decide to make a major addition to the house and want to borrow an additional $70000 to finance the new construction. They also wish to lengthen the overall length of the loan by 8 years (i.e. until 23 years after the date of the original loan). In the negotiations the lender agrees to these modifications, but only if the effective interest rate for the remainder of the loan after the first 5 years s raised to 6.5%. Find the revised annual payment which would result for the remainder of the loan. ANSWER = $

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