A while ago, a couple purchased a home with a sales price of $810,000, making a 5% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.7% for the first nine years. Now tha the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance intor fixed rate 15-year mortgage at 4.8%, allowing them to pay it off before they retire. What will their new monthly payments be? Assume there are no costs associated with the refinance. Answer $ (Round to the nearest cent/penny) Note: In many adjustable rate mortgages, there is a period of time where the interest rate is fixed. After that time, the rate can adjust regularly based on economic conditions and bank policy. This means the monthly payments could change dramatically once the "fixed rate" period, in this case the first 9 years, is over.

A while ago, a couple purchased a home with a sales price of $810,000, making a 5% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.7% for the first nine years. Now tha the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance intor fixed rate 15-year mortgage at 4.8%, allowing them to pay it off before they retire. What will their new monthly payments be? Assume there are no costs associated with the refinance. Answer $ (Round to the nearest cent/penny) Note: In many adjustable rate mortgages, there is a period of time where the interest rate is fixed. After that time, the rate can adjust regularly based on economic conditions and bank policy. This means the monthly payments could change dramatically once the "fixed rate" period, in this case the first 9 years, is over.

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 while ago, a couple purchased a home with a sales price of $780,000, making a 5% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.1% for the first seven years. Now that the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance into a fixed rate 15-year mortgage at 4.1%, allowing them to pay it off before they retire. What will their new monthly payments be? Assume there are no costs associated with the refinance. Answer = $ (Round to the nearest cent/penny) Note: In many adjustable rate mortgages, there is a period of time where the interest rate is fixed. After that time, the rate can adjust regularly based on economic conditions and bank policy. This means the monthly payments could change dramatically once the "fixed rate" period, in this case the first 7 years, is over.
Ten years ago the Jacksons bought a house, taking out a 30 year mortgage for $170,000 at 6.5%. This year (exactly 10 years later) they refinanced the house, taking out a new 30 year mortgage for the remaining balance at 4.25 % . What was the monthly payment on the original 6.5% mortgage? What was the remaining balance after 10 years (the amount they then refinanced)? How much interest did they pay during those first 10 years? What is the monthly payment on the refinance 4.25% mortgage? How much interest will they pay over the 30 year term of the refinance? How much total interest will they pay over the full 40 years the Jacksons have a loan for the house?
A family currently live in an apartment whose monthly rent is $950. They are thinking of buying a house which would cost $220,000. They plan to live in this house for 5 years and sell it at the end of the 5th year. They would put a downpayment of $20,000 and finance the balance through a mortgage at 3.5% interest rate. The mortgage is to be repaid in 5 annual installments (which include both principal and interest) at the end of each year for the next 5 years The house will have the following additional expenses: annual maintenance: $1500, Property taxes $5500, Insurance: $1200. Assume they are in tax bracket of 20% and the price of home, rent and expenditure increases by 2.5% per year. Their opportunity cost or required rate of return is 5% per year. Note that property taxes are tax deductible and there no tax payable on capital gains. Use annual compounding for amortization schedule of mortgage Calculate Ownership Operating Advantage in year 1. Ⓒ($39.596) O ($39.924) Ⓒ($39,631)…
A year ago, a newly married couple decided not to buy a house, and they were looking at a house with a $200,000, 15-year monthly mortgage. The annual rate was 2.8%. Today, that same house and the same $200,000 monthly mortgage has an annual rate of 5.2%. What was the monthly payment for the 15-year monthly mortgage if they had taken out the mortgage a year ago? What is the monthly payment for the 15-year monthly mortgage based on today’s rate? What would the monthly payment be if they took out a 30-year monthly mortgage based on today’s rate? Did the couple hurt themselves by waiting? Explain with empirical evidence. You do not have to report the amortization tables
arnie and beth litner recently bought a house for $425,000. They put 10% down as a down payment and took out a 15-year fixed mortgage with monthly payments and an interest rate of 6.8%. 1)What is their monthly payment? 2) What proportion(%) of their mortgage payments made during the first five years will be applied to interest?
klp.2
A family buys a house worth $326,000. They pay a $75,000 deposit and take a mortgage for the balance at J12=9% p.a. to be amortized over 30 years with monthly payments. Find the value of the mortgage on their house? Find the value of the monthly payment? Find the loan outstanding after making 20 payments? Find the principal repaid in the 21st payment?
The McBertys have "$20, 000" in savings to use as a down payment on a new home. They also have determined that they can afford between "$1, 600 and $1,900" per month for mortgage payments. If the mortgage rates are 11% per year compounded monthly, what is the price range for houses they should consider for a 30 - year loan?
Da Feng is looking to refinance his home because rates have gone down since he purchased the house 5 years ago. He started with a 30-year fixed-rate mortgage of $276,000 at an annual rate of 7.30%. He has to make monthly payments. He can now get a 25-year fixed-rate mortgage at an annual rate of 4.30% on the remaining balance of his initial mortgage. This loan also requires monthly payments. In order to re-finance, Da Feng will need to pay closing costs of $3,700. These costs are out of pocket and cannot be rolled into the new mortgage. How much will refinancing save Da Feng? (i.e. What is the NPV of the refinancing decision?) $181,311.02 您不应该选择此项 Your calculation was based on a wrong balance on the existing mortgage. O $85,659.68 $86,861.44 $83,161.44
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 ?
Bill and Susan bought a home for $190,000 and made a 20% down payment. They got a fixed rate mortgage at 3.5% for 20 years. What will their payments be?
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