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QUESTION 1

"A borrower takes a $300,000 loan with fixed rate of 4% amortized with monthly payments over 30 years. There are prepaid finance charges of 1 point on the loan amount plus $1,500. Calculate the APR. [Format Answer as a percentage - X.XX]"

QUESTION 2

"A borrower is considering a 1-year adjustable rate mortgage of $250,000 that starts at 2.5%, 30 year amortization. The margin is 2.25%. The annual change caps are 2% per year. The current index is 1.25%. The life cap is 6% over the start rate. What is the inital monthly payment?"

QUESTION 3

What is the fully indexed rate? [Format Answer as a percentage - X.XX]

QUESTION 4

"At the end of year 1, what is the maximum allowed interest rate? [Format Answer as a percentage - X.XX]"

QUESTION 5

If the INDEX moves up to 1.75%, what is the monthly payment for year 2? [WARNING: The loan balance is paid down a bit during the first year.]

Please explain & show how to calculate!

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M91589996

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