The fully-indexed rate on a 51 arm with a maturity of 30, Ask an Expert

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The fully-indexed rate on a 5/1 ARM with a maturity of 30 years is determined by the yield on the one-year LIBOR plus a margin of 250 basis points. If the fully-indexed (composite) rate is currently 6%, what is the current yield on the one-year LIBOR (in percent)?

If the initial rate on this loan is 4.5% and the amount borrowed is $375,000, what will the scheduled payments be for the first five years of the mortgage?

If there are no caps or other limitations on loan payments in this mortgage, what are the scheduled payments in the sixth year of the loan if the yield on the one-year LIBOR is 5% at the first reset date?

If there is a 1% annual interest rate adjustment cap over the initial composite rate in this mortgage, what are the scheduled payments in the sixth year of the loan if the yield on the one-year LIBOR is 5% at the first reset date?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91539092

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