You are buying a house and the mortgage company offers to let you pay a "point" (1.0% of the total amount ofthe loan) to reduce your APR from 6.50% to 6.25% on your $400,000, 30-year mortgage with monthly payments. Ifyou plan to be in the house for at least 5 years, should you do it? (Note: Be careful not to round any intermediatesteps less than six decimal places.)The monthly mortgage payment at 6.50% APR is $ 2528.27. (Round to the nearest cent.)The monthly mortgage payment at 6.25% APR is $ 2462.87. (Round to the nearest cent.)The lower interest rate on the mortgage results in monthly savings of $ 65.4. (Round to the nearest cent.)The PV of the monthly savings is $(Round to the nearest cent.)

Loans are paid by equal and fixed installments and these carry the payment for interest and payment…

You are buying a house and the mortgage company offers to let you pay a "point" (1.0% of the total amour the loan) to reduce your APR from 6.50% to 6.25% on your $400,000, 30-year mortgage with monthly pay you plan to be in the house for at least 5 years, should you do it? (Note: Be careful not to round any intern steps less than six decimal places.) The monthly mortgage payment at 6.50% APR is $ 2528.27. (Round to the nearest cent.) The monthly mortgage payment at 6.25% APR is $2462.87. (Round to the nearest cent.) The lower interest rate on the mortgage results in monthly savings of $ 65.4. (Round to the nearest cent. The PV of the monthly savings is $ (Round to the nearest cent.)

You are buying a house and the mortgage company offers to let you pay a "point" (1.0% of the total amour the loan) to reduce your APR from 6.50% to 6.25% on your $400,000, 30-year mortgage with monthly pay you plan to be in the house for at least 5 years, should you do it? (Note: Be careful not to round any intern steps less than six decimal places.) The monthly mortgage payment at 6.50% APR is $ 2528.27. (Round to the nearest cent.) The monthly mortgage payment at 6.25% APR is $2462.87. (Round to the nearest cent.) The lower interest rate on the mortgage results in monthly savings of $ 65.4. (Round to the nearest cent. The PV of the monthly savings is $ (Round to the nearest cent.)

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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You have $25,000 available for a down payment on your new home. You have determined that you can afford a monthly mortgage payment of $1,250 for principal and interest. If thirty-year terms (360 months) are available for home-financing at 4.0%, what is the highest-valued home you can afford to the nearest $1,000 (do not forget your down payment!). O $292,000 O $287,000 O $262,000 O $237,000 O $242,000
You plan to purchase a house for $295000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price. You will not pay off the mortgage early. Your bank offers you the following two options for payment. Option 1: Mortgage rate of 5.35 percent and 1 point. Option 2: Mortgage rate of 5.25 percent and 2 points. Which option should you choose?
You need a 30-year, fixed-rate mortgage to buy a new home for $210,000. Your mortgage bank will lend you the money at a 7.1 percent APR for this 360-month loan. However, you can afford monthly payments of only $850, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $850? Multiple Choice $677,443.06 $726,330.71 $83,517.92 O $698,394.91
A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The loan will be $200,000 at 6 percent interest for 20 years. a. How would you analyze these alternatives? b. What if the biweekly loan was available for 5.75 percent? How would your answer change? c. If you take the monthly payment and agree to pay ½ of it every two weeks, when would your loan reach maturity?. Please correct and with steps.
Your friend tells you he has a very simple trick for taking one-third off the time it takes to repay your mortgage: Use your Christmas bonus to make an extra payment on January 1 of each year ( that is, pay your monthly payment due on that day twice). If you take out your mortgage on July 1, so your first monthly payment is due August 1, and you make an extra payment every January 1, how long (in years) will it take to pay off he mortgage? Assume that the mortgage has an original term of 30 years and an APR of 10.2%. (Hint: The original balance does not matter in this problem, so you can pick any number you want. In this case we will use $100,000 as the principal balance.) Round to three decimal places.
You need a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend you the money at an APR of 5.35 percent for this 300-month loan. However, you can afford monthly payments of only $800, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $800? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Balloon payment
A homebuyer wishes to take out a mortgage of $200,000 for a 40-year period. What monthly payment is required if the interest rate is 11%? What is the total amount paid during the term of the loan? Carry out all calculations exactly and round the final answers only. Carry out all calculations exactly and round the final answer for the monthly payment to two decimal places and the final answer for the total amount paid to the nearest integer. The required monthly payment is $L The total amount paid during the term of the loan is $
Let’s assume that you plan to purchase a house which is selling for $350,000 today. You will make a monthly payment for the next 30 years, with an annual interest rate of 3%. What will be the amount of your monthly mortgage (i.e., home loan) payment? answer choices $1,890.37 $1,400.01 $1,475.61 $1,228.14
You have just purchased a home and taken out a $550,000 mortgage. The mortgage has a 30-year term with monthly payments and an annual percentage rate (APR) (with semi-annual compounding) of 6.80%. (Note: Be careful not to round any intermediate steps less than six decimal places.) a. How much will you pay in interest, and how much will you pay in principal, during the first year? b. How much will you pay in interest, and how much will you pay in principal, during the twentieth year (i.e., between 19 and 20 years from now)? a. How much will you pay in interest, and how much will you pay in principal, during the first year? During the first year, you will pay an interest payment of $ (Round to the nearest dollar.) During the first year, you will pay a principal payment of $ (Round to the nearest dollar.)
Answer the following question using a spreadsheet and the material in the appendix. You would like to buy a house. Assume that given your income, you can afford to pay $12,000 a year to a lender for the next 30 years. If the interest rate is 7% how much can you borrow today based on your ability to pay? What about if the interest rate is 3%? Maximum mortgage at 7%: $ Maximum mortgage at 3%: $
Assume that a broker agent introduces you to a local bank, and that bank offers you their lowest interest rate at 3.25% APR, with a 10-year fixed interest rate or 20-year fixed interest rate. 1) If you want a 10-year, fixed mortgage loan, find the monthly mortgage payment for a house that you will borrow $500,000 with no down payment. 2) Determine the total amount paid over the full term of the loan. 3) How much interest will be paid on the loan over the 10 years?
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