The incremental cost of borrowing the additional funds

Assignment Help Financial Management

Reference no: EM131043570

John purchased a house for $300,000 and seeks an loan. His lender presents two options; 80% LTV at 4% or 90% LTV a 5%. Both loans are paid monthly and have a 30 year terms. What is the incremental cost of borrowing the additional funds? How would you answer change is 2 points were charged on the 90% loan? What would be the incremental cost of the additional money if John planned to stay in the home for only 5 years?

Reference no: EM131043570

Questions Cloud

Human resource management involves : Human resource management involves a steady stream of activities.An HR manager's job revolves around a set of functions including HR planning,staffing,developing employees,appraisal,and compensation and benefit.

The term structure of interest rates is affected : The term structure of interest rates is affected by which of the following? I. Interest rate risk premium II. Real rate of interest III. Default risk premium IV. Inflation premium

Market efficiency tends to be supported by current evidence : Which one of the following statements related to market efficiency tends to be supported by current evidence?

Develop effective business plan for launching a new product : Human resource strategies can be stimulating to produce and satisfying to display, but how can we make sure that they are implemented? - Should do SWOT analysis, identify potential customer, geographical area, business competitors.

The incremental cost of borrowing the additional funds : John purchased a house for $300,000 and seeks an loan. His lender presents two options; 80% LTV at 4% or 90% LTV a 5%. Both loans are paid monthly and have a 30 year terms. What is the incremental cost of borrowing the additional funds? How would you..

Example of an actual data warehouse : Find an example of an actual data warehouse. For this example, describe the content, purpose, user access methods, and sources of data (what on-line transaction processing [OLTP] databases feed data into the data warehouse) - (make sure that your ..

Assume the returns on an asset are normally distributed : Assume the returns on an asset are normally distributed. Suppose the historical average annual return for the asset was 6.7 percent and the standard deviation was 12.6 percent. What is the probability that your return on this asset will be less than ..

Write an assembly language program : Write an assembly language program, which adds three numbers and stores the result at ADDD. The numbers are defined at three consecutive locations

What is operating cash flow and cash flow to stockholders : Volbeat Corp. shows the following information on its 2015 income statement: sales = $227,000; costs = $129,000; other expenses = $7,900; depreciation expense = $14,200; interest expense = $13,700; taxes = $21,770; What is the 2015 operating cash flow..

User Account

All Pages