Based on the following scenario, how much is the monthly savings when comparing a conventional loan with mortgage ins ine second mortgage option? The borrower plans to put 10% down on a sales price of $325,000. The first mortgage interest rate is 6 1/4% on a 30-year fixed-rate The second mortgage is 4.250% Use $270 for monthly taxes and $85 for monthly homeowner's insurance MI Factor =.62 Choices: $227.18 $236.14

Based on the following scenario, how much is the monthly savings when comparing a conventional loan with mortgage ins ine second mortgage option? The borrower plans to put 10% down on a sales price of $325,000. The first mortgage interest rate is 6 1/4% on a 30-year fixed-rate The second mortgage is 4.250% Use $270 for monthly taxes and $85 for monthly homeowner's insurance MI Factor =.62 Choices: $227.18 $236.14

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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Your bank offers the following options on a $100,000 mortgage: i) A 15-year, 4% loan with no points ii) A 15-year, 3.5% loan, with 1.5 discount points If you plan to repay the loan in five years, what is the present value of the savings from having a lower outstanding balance at the end of the 5 years if you choose the option with points? (Use the 3.5% interest rate to discount the savings). [Hint: you first need to compute the outstanding balance at the end of year 5 for each option] $765.87 None of the above. $643.08 $1,000 please typing format
You want to buy a house that costs $290,000. You will make a down payment equal to 10 percent of the price of the house and finance the remainder with a loan that has an APR of 5.51 percent compounded monthly. If the loan is for 20 years, what are your monthly mortgage payments? Group of answer choices $1,736.96 $1,886.70 $1,821.54 $1,796.86 $1,788.65
to determine the regular payment amount, rounded to the nearest dollar. The price of a small cabin is $55,000. The bank requires a 5% down payment. The buyer is ffered two mortgage options: 20-year fixed at 7% or 30-year fixed at 7%. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 20-year option? se PMT= Find the monthly payment for the 20-year option, (Round to the nearest dollar as needed.)
Do analysis comparison between 30 and 15 years mortgage (at least one page not double spacing. You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 30-year mortgage at 3.25% annual interest rate for the cost of the house after they receive a 20% down payment.
Many mortgage company allow youto "buy down" your interest rate of your loan by buying points. A point is equal to 1% of your mortgage amount (or $1,000 for every $100,000). You're essentially paying some interest up front in exchange for a lower interest rate over the life of your loan. Find the following payments and total cost (including points) of a $170,000.00 that is borrowed for 30 years with a) 6, % compounded monthly with no points $ The total cost would be $ 1 b) 6– % compounded monthly with 1 point $ 4. The total cost would be $ c) 6% compounded monthly with 2 points $ The total cost would be $
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 $
Problem: You are interested in a fixed-rate mortgage for $399,000 and need to choose the between options: a 15-year mortgage or a 30- year mortgage. The current mortgage rate is 3.75% for the 15-year mortgage, and 3.25% for the 30-year mortgage. Both require a 15% down payment. (Hint: make use of the amortization formula from Chapter 12). (a) What are the monthly principal and interest payments for EACH loan? Show your work. (b) What is the total amount of interest paid on EACH loan? Show your work. (c) Overall, how much more interest is paid by choosing the 30-year mortgage? Show your work.
3. For a house price of $775, 000 use the following information to calculate: * 5% down payment and mortgage the rest * bank offers a 1.95 % interest rate for a 5-year fixed rate mortgage based on an amortization period of 25 years. a)Calculate the down payment. b) Subtract the down payment. c) Amount of mortgage ( include the mortgage insurance) d) Use a graphing calculator to determine monthly mortgage payment. PV PMT FV Annual Rate Periods Compounding : SEMI-ANNUALLY e) the total amount repaid to the bank f) the total interest paid over the life of the mortgage h) Add in down payment. Calculate the total amount to own the home
You have a choice between a 30-year fixed rate loan at 6.5% and an adjustable rate mortgage (ARM) with a first year rate of 4%. Neglecting compounding and changes in principal, estimate your monthly savings with the ARM during the first year on a $225,000 loan. Suppose that the ARM rate rises to 7% at the start of the third year. Approximately how much extra will you then be paying over what you would have paid if you had taken the fixed rate loan? What is the approximate monthly savings with the ARM during the first year? S (Round to the nearest dollar as needed.)
Suppose you have budgeted $ 950 a month towards a mortgage. If you are offered a 15-year mortgage at an interest rate of 6.25%, how expensive a home mortgage can you afford? Home price =
You want to buy a $150,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan at 4.9% interest for the rest. The bank will charge 3 points on the amount financed. a) What is the amount of the down payment? b) How much is the loan amount going to be? c) What will be the amount charged for 3 points? *1 point is 1 % of the mortgage amount d) Find the amount of the monthly payment. (Do not add the cost of the points to the loan amount) Hint: click here Question Help: D Video Message instructor %24
When purchasing a $100,000 house, a borrower is comparing two loan alternatives. The first loan is an 80% loan at 4% with monthly payments of $591.75 for 15 years. The second loan is 90% loan at 5% with monthly payments of $526.13 over 25 years. What is the incremental cost of borrowing the extra money assuming the loan will be held for the full term? O 6.50% O 13.21% O 7.20% O 13.70%

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