Question 2 Rick the developer is having a hard time selling a house listed at $300,000. Being desperate he decides to offer financing: a $300,000 super "sub-prime" 25- year mortgage at a mere quoted 6% (annual yield). Payments are monthly. (When calculating the effective interest rate, use 8 decimals) (a) What is the monthly payment Rick is asking the purchaser to make? Find the monthly effective interest rate Rick is so desperate that he is also willing to sell the house for $150,000 cash today. Hank can get financing from the bank at a mortgage rate of 8% (annual yield). (b) What is the monthly payment on this bank mortgage for $150,000 amortized over 25 years? (c) Which of the above mortgages should Hank take? How much Hank would save in present time? (d)

Question 2 Rick the developer is having a hard time selling a house listed at $300,000. Being desperate he decides to offer financing: a $300,000 super "sub-prime" 25- year mortgage at a mere quoted 6% (annual yield). Payments are monthly. (When calculating the effective interest rate, use 8 decimals) (a) What is the monthly payment Rick is asking the purchaser to make? Find the monthly effective interest rate Rick is so desperate that he is also willing to sell the house for $150,000 cash today. Hank can get financing from the bank at a mortgage rate of 8% (annual yield). (b) What is the monthly payment on this bank mortgage for $150,000 amortized over 25 years? (c) Which of the above mortgages should Hank take? How much Hank would save in present time? (d)

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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H2. A homeowner can obtain a $250,000, 30-year fixed-rate mortgage at a rate of 6.0 percent with zero points or at a rate of 5.5 percent with 2.25 points. How long must the owner stay in the house to make it worthwhile to pay the points if the payment saving is invested monthly? (please do not solve in the excel)
None
13) Some financial advisors recommend that your monthly mortgage payment be no higher than 28% of your monthly net income. What is 28% of your monthly net income, as determined in question twelve? This is the estimated amount you can afford per month for a mortgage. 4,518*0.28 $1,265 28% of my monthly net income is $1,265. 14) We can calculate how much of a house you can afford using the loan formula. In question thirteen, you determined the monthly mortgage payment you can afford. Using this value for the regular monthly payment, calculate the present value (P), assuming you receive a 30-year mortgage (loan) with an annual interest rate of 6.328% with monthly compounding. (Note: This rate is realistic for a mortgage initiated in January 2024.) I need to use Loan formula to find the present value (P). please help me
7
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely.
#12- The price of a condominium is $88,000. The bank requires a 5% down payment and one point at the time of closing. The cost of the condominium is financed with a 30-year fixed-rate mortgage at 7%. Find the required down payment. Find the amount of the mortgage. How much must be paid for the one point at closing? Find the monthly payemnt.(excluding escrowed taxes and insurance) Find the total cost of interest over 30 years. Round all to the nearest dollar, as needed.
6. You plan to buy a house that sells for $250,000. You plan to put 10% down and finance the rest. You are exploring the following financing options: i. 30-yr mortgage with a stated annual interest of 6.5% ii. 15-yr mortgage with a stated annual interest of 6%. You plan to pay off the loan by making equal monthly payments. What would be your monthly payment if you take the 30-yr mortgage? How much (total) interest would you pay over the life of the loan? $1422.15, $286,974 b. What would be your monthly payment if you take the 15-yr mortgage? How much (total) interest would you pay over the life of the loan? $1898.68, $116,762.01 a.
A couple visits an open house and fall in love with the floor plan and location. They tell the host they would love to buy the house but do not know if they can afford it. In the conversation, the broker learns that they are currently paying $1750 per month for rent. Would the principal and interest payments be within the amount of their current rent if the price is $249,000 with interest rates for a zero down, 30 years mortgage at 5% interest? Note: 30 years of 5% interest is $5.37. A. Only if they have a 20% down payment. B. No, the payment is more than their current rent amount C. There is not enough information to determine an answer D. Yes, the payment is within the range of their current rent amount.
13. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You've decided to buy a house that is valued at $1 million. You have $100,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $900,000 mortgage, and is offering a standard 30-year mortgage at a 10% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate used to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a 15-year, $900,000…
Explain All point of question with proper Answer.
Vijay
QUESTION 5 Ann wants to buy a building. The annual NOI for the building will be $165,000. She wants to get a 20 year interest only fixed rate mortgage at an annual rate of 7.35% with annual compounding and annual payments to buy the building. The lender has a minimum Debt Service Coverage Ratio (DSCR) of 1.25. The lender also has a maximum LTV requirement of 70%. The asking price is $3,000,000. What is the largest mortgage the lender will give Ann based on both the DSCR and LTV requirements? A. $1,795,918.37 OB. $2,100,000.00 OC. $2,532,047.61 OD. $132,000.00

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