Homeowner would need to make if loan is fully amortizing

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Reference no: EM132052972

1. Suppose a potential home buyer is interested in taking a $500,000 mortgage loan that has a term of 30 years and a fixed mortgage rate of 5.25%. What is the monthly mortgage payment that the homeowner would need to make if this loan is fully amortizing?

A. $552.50

B. $2,761.02

C. $17,820.72

D. $33,458.47

2. Given the following information, calculate the Effective Borrowing Cost (EBC). Loan amount: $175,000, Term: 30 years, Interest rate: 7 %, Payment: $1,164.28, Discount points: 1, Origination fee: $3,250. Assume the loan is held until the end of year 10.

A. 0.6%

B. 3.8%

C. 7.0%

D. 7.4%

Reference no: EM132052972

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