Given the following information on two fixed-rate fully amortized mortgages and consider the refinancing decision of the old loan at the end of Yea 10. Loan Amount Loan Term Fully Amortized Interest Rate Origination Fee Prepayment Penalty Old Loan 4,000,000 30 years Yes 7% 3% 7% New Loan 20 years Yes 5.5% 4% 3% What is the refinancing cost at the end of Year 10? (choose the closest answer) $206,000 $240,000 $343,000 $378,000

Given the following information on two fixed-rate fully amortized mortgages and consider the refinancing decision of the old loan at the end of Yea 10. Loan Amount Loan Term Fully Amortized Interest Rate Origination Fee Prepayment Penalty Old Loan 4,000,000 30 years Yes 7% 3% 7% New Loan 20 years Yes 5.5% 4% 3% What is the refinancing cost at the end of Year 10? (choose the closest answer) $206,000 $240,000 $343,000 $378,000

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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Similar questions

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
Consider a home mortgage of $125,000 at a fixed APR of 4.5% for 25 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest. ..... a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.)
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)
Please do not give solution in image format ?
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.
V4. A $200,000 30 year mortgage with a contract rate of 8.94%, $3000 closing costs (lawyer, appraisal, and transfer tax) and $1,000 in discount points (i.e mortgage setup fee). The monthly mortgage payment is determined to be $1600. what will be the effective borrowing rate if the borrower decides to pay off the loan at the end of year 8? Assume that the mortgage is based on monthly compounding.
A homeowner can obtain a $250,000, 30-year fixed-rate mortgage at a rate of 6.0% with zero points or at a rate of 5.5% with 2.25 points. If you will keep the mortgage for 30 years, what is the net present value of paying the points (to the nearest dollar)? A. $7,564 B. $7,222 C. $8,360 D. $9,475

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