How much is the prepayment fee

Reference no: EM131948339

Question: A borrower has a $10,000,000 interest-only loan at 8% interest rate for 20 year. There is a lockout period of 10 years.

a. Should the borrower choose to prepay this loan at any time after the end of the 10th year, a yield maintain fee (YMF) will be changed, so the lender will make 8% for the entire 20 year. Assuming the loan is prepaid at the end of year 12 and the mortgage interest rate at that time is 6% How much is the YMF fee.

b. Should the borrower choose to prepay this loan at any time after the end of the 10th year, a prepayment fee of 2% of balance will be changed, Assuming the loan is prepaid at the end of year 12 and the mortgage interest rate at that time is 6%. How much is the prepayment fee?

Reference no: EM131948339

Questions Cloud

Analyzing business communication theories : What should be the main focus? Is it overcome the dress code issue or analyzing business communication theories?

Calculate how your interest payment changes over time : Create an Excel spreadsheet and calculate how your interest payments, principal payments, and the outstanding loan balance changes over time for each of these.

Devising a contingency action plan for a company : Imagine that you are on a committee that has been tasked with devising a contingency action plan for a company.

Differences in contingency and situational leadership : Compare and contrast the differences in contingency and situational leadership. Then, determine the key influences they each have on organizational performance.

How much is the prepayment fee : Should the borrower choose to prepay this loan at any time after the end of the 10th year, a prepayment fee of 2% of balance will be changed.

Name the disadvanatages of form of business : What form of business ownership is the easiest to start and end. Name the disadvanatages of this form of business.

Compute the amount of each payment : You are borrowing $21,800. The terms of the loan call for monthly payments for 5 years at an annual 8.25%interest rate. What is the amount of each payment?

What is the internal rate of return on the loan : A borrower has a 30 year fully amortizing FRM, with a $300,000 balance, 4.5% rate. There is a 3% prepayment penalty on this loan if it is repaid before 5 years.

Department of labor employment and training administration : Use the Department of Labor's Employment and Training Administration website and find the area on Registered Apprenticeship.

User Account

All Pages