ou have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. Sometimes commercial lenders will amortize a loan for 10 years, but require the borrower to pay off the loan in a shorter period of time by paying off the rest of the loan in one final payment, known as a "balloon" payment. How much would you have to pay for that balloon payment (the ending balance) if your loan was still amortized for 10 years but you had to pay it off in 5 years?

ou have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. Sometimes commercial lenders will amortize a loan for 10 years, but require the borrower to pay off the loan in a shorter period of time by paying off the rest of the loan in one final payment, known as a "balloon" payment. How much would you have to pay for that balloon payment (the ending balance) if your loan was still amortized for 10 years but you had to pay it off in 5 years?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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You have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. What is the total interest paid on this mortgage over the 10 year term?
You have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. How much would your monthly payment be if you negotiated a proce of $275,000 instead of $320,000 but kept your downpayment the same?
You have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 5.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. What would your monlthy interest rate be?
You have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. What is the ending balance on the mortgage after the first year?
a You want to buy house that costs $170,000. You have $17,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $153,000. However, the realtor persuades the seller to take $153,000 mortgage called a seller take-back mortgage) at a rate of 8% provided the loan is paid off in full in 3 years. expect to inhent $170,000 in 3 years, but light now all you have is $17,000 and you can afford to make payments of no more than $19,000 per year given your salary. (The loan would call for monthly payments, but assume things.) end-of-year annual payments to simplify p a) If the loan was amortized over 3 years, how large would each annual payment be? Round your answer to the nearest cent b) If the loan was amortized over 30 years, What would each payment be? Round your answer to the nearest cent. C) To satisfy the seller, the 30-year mortgage loan would be written as a balloun note, which means at the end of the third year, you would have to make the
You want to buy a house that costs $170,000. You have $17,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $153,000. However, the realtor persuades the seller to take a $153,000 mortgage (called no more than $17,000 per year given a seller take-back mortgage) at a rate of 10%, provided the loan is paid off in full in 3 years. You expect to inherit $170,000 in 3 years, but right now all you have is $17,000, and you can afford to make payments your salary. (The loan would call for monthly payments, but assume end-of-year annual payments to simplify things.) a. If the loan was amortized over 3 years, how large would each annual payment be? Do not round Intermediate calculations. Round your answer to the nearest cent. $ Could you afford those payments? -Select- b. If the loan was amortized over 30 years, what would each payment be? Do not round Intermediate calculations. Round your answer to the nearest cent. $ Could you afford those…
I need a detailed explanation on how to solve this problem: You want to buy a house for $245,000, on a 35-year, fixed rate mortgage. The bank offers you a 420 month, 5.4% APR mortgage. You can only afford to pay $850 per month. But you offer to pay off the remaining balance at the end of the loan in a single balloon payment. - How much will the balloon payment be for you to keep the monthly payment at $850?
You are looking at a one-year loan of $20,000. The interest rate is quoted as 10 percent plus 2 points. A point on a loan is simply 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. The interest rate quotation in this example requires the borrower to pay 2 points to the lender up front and repay the loan later with 10 percent interest. What rate would you actually be paying here?
Many mortgage lenders offer a way to lower your interest rate by paying some of the interest up front. This prepaid interest is known in the industry as points. Each point corresponds to 1% of the amount borrowed. In short, you're paying a fee to lower your interest rate. A lender offers you a 10-year fixed mortgage of $150,000 at 2.8% interest when you buy 1 point. Find the monthly payment. Do not round intermediate calculations. Round your answer to the nearest centavo. The monthly payment would be S x
You are buying a house and will borrow $245,000 on a 25-year fixed rate mortgage with monthly payments to finance the purchase. Your loan officer has offered you a mortgage with an APR of 4.80 %. Alternatively, she tells you that you can "buy down" the interest rate to 4.45% If you pay points up front on the loan. A point on a loan is 1% (one percentage point) of the loan value. How many points, at most, would you be willing to pay to buy down the interest rate? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.164.) Maximimum points
You are borrowing $250,000 to buy a house, using a standard, 30-year mortgage. Your mortgage lender offers a 5.50% mortgage with no points, or a 5.20% mortgage with X points. You plan on living in the house for exactly 84 months, paying only the required payment each month, and without refinancing your mortgage. What points will make you indifferent between the two mortgages? Use the 5.50% rate to discount cash flows between the two options. Note: all rates in the problem are nominal annual rates with monthly compounding. Recall, 1 point is 1% of the mortgage. Carry your answer to 2 decimal places. For example, if your answer is 1.255 points, answer "1.26". a
you wish to purchase real property. the lender will give you a 250000 fixed rate 30 year mortgage at 3.5% per annum. suppose that before you can make any payments you receive a pay raise so you can pay an extra 200 per month with your normal payment. how many payments are required to fully amortize the loan assuming the extra 200 is paid each month?