You are considering taking out a 15-year loan versus a 30-year loan for a home. Explain what the pros cons of both loan types are. Be sure to add appropriate detail to receive full credit. BIUST E11
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- Watch the Mathematics of Finance video and then answer the question given below. Simple interest loans are generally used for which type of loan? Click here to watch the video. Choose the correct description of a simple interest loan. A. Home Mortgage loans B. Short term loans of less than a year C. Car loans D. Long term loans of a year or moreAfter examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at 8 percent compounded or from a bank at 9 percent compounded . Which alternative is more attractive?You want to buy a house and received the following loan quotes, What is the incremental cost of Loan B? Select the closest figure. LTV Rate Loan A 80% 4.0% Loan B 90% 4.5% O 7.5% O 4.0% 10.5% 4.5% O 8.5% O 9.5%
- Participation #3: Discuss mortgage loans in terms of the time value of money and loan amortization. What important points should every homeowner know about how mortgages work? (Hint: Think about taxes and getting the mortgage paid off.)First-time homeowners often use FHA loans to finance their home. Go to fha-home-loans.com and find out the current requirements to qualify for an FHA loan. They may differ slightly from that described in the book because the underwriting requirements frequently change. Summarize the types of loans that are currently available. What is the highest loan-to-value ratio that you could obtain?You are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = Amount of Loanx Interest Ratex Term of Loan where FsFs is the finance charge for the loan, and the term of the loan is in . You’re borrowing $10,000 for two years with a stated annual interest rate of 6%.
- (Q) You would like to purchase a home and are interested to find out how much you can borrow. When your lender calculates your debt to income ratio, he determines that your maximum monthly payment can be no more than $3, 200. You would like to have a 30 year fully amortizing loan and the interest rate offered on such a loan is currently 8.5%. Given these constraints, what is the largest loan you can obtain?Prove the loan payment formula, shown below. PMT=Prn1−1+rn−nt Question content area bottom Part 1 Manipulate the formula shown below to prove the loan payment formula. The left side of the equation is the future value of the principal amount and the right side is the future value of the loan payments. First, solve the equation for PMT. P1+rnnt = PMT1+rnnt−1rnUsing the average interest rate for a federal loan of 2.75% AND the average interest rate for a private loan of 5.8%, calculate how long it'll take you to pay off both federal and private loan using the total cost from part 2. What would your monthly loan payments be (have realistic monthly loan payments as you would have other expenses)?
- lending of things/money to individuals or organizations that is expected to be paid back on acertain time with interest. Loan Business Loan Consumers Loan Mortgage |I> SLIDESMANIA.COMSuppose you are shopping for a mortage and the lender presents you with long menu on loan options. For each option, there is a discount point charged at an interest rate given. The amount of the point ranges anywhere from -2% to 3%. When would it be optimal for you select a loan with a discount point of 3%? Group of answer choices 1) Only when the point is equal to the effective borrowing cost 2) Never 3) Only with ARM 4) If you have a very short holding period 5) If you have a very long holding periodSuppose you are shopping for a mortgage and the lender presents you with a long menu of loan options. For each option, there is a discount point charged and an interest rate given. The amount of the point ranges anywhere from -1% to 3%. When would it be optimal for you select a loan with a point of 2%? (Assume there is no affordability constraint, ie: you have the money to buy whatever point you would like). If you have a very short holding period O Never O If you have a very long holding period O Only when the point is equal to the effective borrowing cost O Always