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. Let's say that your lender was only willing to offer you a 5-year fixed rate commercial mortgage (a loan amortized over 5 years) rather than a 10-year loan. What would your monthly payment be for a 5-year loan, if all of the other original loan terms stayed 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 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. Let's say that your lender was only willing to offer you a 5-year fixed rate commercial mortgage (a loan amortized over 5 years) rather than a 10-year loan. What would your monthly payment be for a 5-year loan, if all of the other original loan terms stayed the same?
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 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.
Let's say that your lender was only willing to offer you a 5-year fixed rate commercial mortgage (a loan amortized over 5 years) rather than a 10-year loan. What would your monthly payment be for a 5-year loan, if all of the other original loan terms stayed the same?
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