A mortgage lender has offered you a $325,000 15-year 3/1 Hybrid adjustable rate mortgage (ARM) loan with monthly payments that fully amortizes with $4,000 of origination fees. The initial rate of the offered loan is 3.6%, but future payments after the loan resets will be indexed the current 10-year T-bond rate plus a margin of 276 basis points. There are no interest-rate caps on the loan and the 10-year T-bond rate will be equal to 3.24% at the time the loan will be originated. What is the anticipated size in dollars of the 44th payment rounded to the nearest cent?

A mortgage lender has offered you a $325,000 15-year 3/1 Hybrid adjustable rate mortgage (ARM) loan with monthly payments that fully amortizes with $4,000 of origination fees. The initial rate of the offered loan is 3.6%, but future payments after the loan resets will be indexed the current 10-year T-bond rate plus a margin of 276 basis points. There are no interest-rate caps on the loan and the 10-year T-bond rate will be equal to 3.24% at the time the loan will be originated. What is the anticipated size in dollars of the 44th payment rounded to the nearest cent?

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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Imagine you get a $450,000 closed floating rate mortgage (no CMHC needed) having a three-year term and amortized over 25 years. Although the interest rate on the mortgage would change, your monthly payments would remain fixed for the term. Monthly payments would be calculated based on APR of %4.8 compounded monthly and amortization period of 25 years. The actual amount of the interest accrued will be deducted from your fixed monthly payments and the rest would be used for principal repayment. Now, assume that the floating rate itself is 4.2% for the first 6 months, then suddenly jumps to 6% for the next 12 months, then drops to 3.6% for the next 6 months, and then declines to 3% for the final 12 months. Note that all rates are quoted as an APR and compounded monthly. Part A: How much money do you owe (i.e. what is the outstanding balance) after 18 months? Part B: How much interest did you pay over the term of the mortgage? How much was principal?
A mortgage for $200,000 with interest rate of 7.20%, fixed monthly payments, and term of 30 years was originated 10 years ago. If the loan's current balance is refinanced for the rest of the original term of at the rate of 6.30% with monthly payments, what is the implied annual savings rate given that the existing loan has a refinancing fee of 4% of the remaining balance at the time of refinancing and that loan is expected to be outstanding for 9 years? Selected Answer: Below 6% O A. Correct Answer: Е. Between 12% and 14%
Consider a $5,000,000, 10% rate, 30-year mortgage with constant annual payments, fully amortizing. What is the yield to maturity (YTM) of this loan under the following circumstances: (a) No points (b) Three points of disbursement discount (paid by the borrower) (c) One point of disbursement discount (paid by the borrower)
A mortgage broker is offering a $279,000 30-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 4.5 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 7.5 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.) Monthly payment What are the monthly payments after the second year? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment > 2 D TRENE VAR TVUNG S 2006- E - E
What is the effective yield to the lender through the date of prepayment on a $540,000 fixed rate mortgage loan fully amortizing over 30 years but paid off after 10 years if the stated annual interest rate is 6.50%, the lender charges 2.0% as an origination fee, $720 for an appraisal and $36 for a credit report and there is no prepayment penalty? -6.81% -6.71% -6.30% -6.50%
You take out a 15-year FRM for $500,000. The bank offers 5% interest rate but charges you a loan fee of 5% of the total loan amount. What is the actual cost of borrowing of this mortgage? 0.42% 0.48% 5.00% 5.79%
Ironwood Bank is offering a 30-year mortgage with an APR of 6.10% based on monthly compounding. If you plan to borrow $161,000, what will be your monthly payment? (Note. Be careful not to round any intermediate steps less than six decimal places.) The loan payment is § (Round to the nearest cent.)
A mortgage broker is offering a $279,000 30-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 4.5 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 7.5 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.) Monthly payment What are the monthly payments after the second year? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment
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A mortgage broker is offering a 30-year $192,900 mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 4.9 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 7.9 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.) Monthly payment What are the monthly payments after the second year? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Monthly payment
Which of the following statements regarding a 30-year monthly payment amortized mortgage with a nominal interest rate of 8% is CORRECT? Exactly 8% of the first monthly payment represents interest. The monthly payments will decline over time. A smaller proportion of the last monthly payment will be interest, and a larger proportion will be principal, than for the first monthly payment. The total dollar amount of principal being paid off each month gets smaller as the loan approaches maturity. The amount representing interest in the first payment would be higherif the nominal interest rate were 6% rather than 8%.
maka

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