A while ago, a couple purchased a home with a sales price of $780,000, making a 5% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.1% for the first seven years. Now that the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance into a fixed rate 15-year mortgage at 4.1%, allowing them to pay it off before they retire. What will their new monthly payments be? Assume there are no costs associated with the refinance. Answer $ (Round to the nearest cent/penny) Note: In many adjustable rate mortgages, there is a period of time where the interest rate is fixed. After that time, the rate can adjust regularly based on economic conditions and bank policy. This means the monthly payments could change dramatically once the "fixed rate" period, in this case the first 7 years, is over.

A while ago, a couple purchased a home with a sales price of $780,000, making a 5% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.1% for the first seven years. Now that the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance into a fixed rate 15-year mortgage at 4.1%, allowing them to pay it off before they retire. What will their new monthly payments be? Assume there are no costs associated with the refinance. Answer $ (Round to the nearest cent/penny) Note: In many adjustable rate mortgages, there is a period of time where the interest rate is fixed. After that time, the rate can adjust regularly based on economic conditions and bank policy. This means the monthly payments could change dramatically once the "fixed rate" period, in this case the first 7 years, is over.

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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A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them up to 70% of their equity. They puchased their home 10 years ago for $61,760. The home was financed by paying 20% down and signing a 30-year mortgage at 8.1% on the unpaid balance. Equal monthly payments were made to amortize the loan over the 30-year period. The net market value of the house is now $100,000. After making their 120th payment, they applied to the loan company for the maximum loan. How much (to the nearest dollar) will they receive?
A while ago, a couple purchased a home with a sales price of $850,000, making a 15% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.5% for the first nine years. Now that the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance into a fixed rate 15-year mortgage at 5.2%, allowing them to pay it off before they retire. What will their new monthly payments be? Assume there are no costs associated with the refinance.
A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them up to 70% of their equity. They puchased their home 11 years ago for $61,158. The home was financed by paying 10% down and signing a 30-year mortgage at 8.1% on the unpaid balance. Equal monthly payments were made to amortize the loan over the 30-year period. The net market value of the house is now $100,000. After making their 132nd payment, they applied to the loan company for the maximum loan. How much (to the nearest dollar) will they receive? Amount of loan: $ (Round to the nearest dollar.)
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three years ago , the Kennedys purchased a house and took out a mortgage of $ 1,000,000 from the HSBC bank. They amortized the mortgage over 25 years at 2.79\% compounded semi - annually for a 3 year term. The bank calculated their monthly payment should be $ 4,626. How much would the final payment be assuming the same interest rate over the 25 years ?
A young couple has made monthly payments(of equal size, rounded to the nearest cent) over the past 10 years on a 25-year mortgage with Banco Popular. The stated annual rate on the mortgage is 7.25%, compounded semi-annually. They are going to renegotiate their mortgage so that they can pay off their loan over the next 5 years at a lower rate of 5% compounded semi-annually. The first payment at the new rate will be made at the end of the month immediately following the renegotiation. After careful planning they calculate that they will need to spend $1,200 of their monthly income on their mortgage payments to completely pay off the mortgage in 5 years. Assuming that this is affordable to them, and, as a result of the change to the lower rate and the shorter term, by how much have they increased their payment?
A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them up to 70% of their equity. They purchased the home 11 years ago for 68,158. The home was financed by paying 15% down and signing a 30-year mortgage at 9.3% on the unpaid balance. Equal monthly payments were made to amortize the loan over the 30-year period. The net market value of the house is now $100,000. After their 132nd payment they applied to the loan company for the maximum loan. How much ( to the nearest dollar) will they receive? Amount of the loan ____
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A couple has just purchased a home for $354,000.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 3.96% APR with monthly compounding. The mortgage has a term of 30 years. How much interest is paid in the first year?
A couple takes out a loan for $350,000 to purchase a house. They get an adjustable rate mortgage (ARM) that starts with an interest rate of 3.5% annual compounded monthly with a term of 30 years and they will make monthly payments. After two years the interest rate increases 6.5% annual compounded monthly and two years after that the interest rate increases to 8.5% annual compounded monthly. a) What are the loan payments for each interest period in this loan? b) What is the total interest paid on this loan?
An individual wishes to purchase a house that is selling for $200,000. The person has $50,000 they can use as a down-payment towards the purchase of the house. The bank is offering a 5-year Term with an interest rate of 10% compounded monthly. The mortgage amount will be amortized over a period of 10-years. What are the individual's monthly payments? How much of the original amount of the mortgage is still outstanding at the end of the 5-year Term of the mortgage disçussed in Part 1 of this problem?

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