What is initial monthly payment in each of respective loans

Assignment Help Financial Management

Reference no: EM132024329

Property appraisal is $2.8 an you believe you can borrow the funds based on an 80% LTV ratio.

Interest rate - 30 year fixed: 4.625%, 2 points required to close the loan.

Interest rate - 15 year fixed: 4.0%

Note: Fully amortized, monthly payments

Answer the following questions, show your calculations:

What is the initial monthly payment in each of the respective loans?

Compare the amount of interest which would be paid on the 30 year vs. the 15 year loan.

Which loan would you choose assuming there is 80% loan to value on the property? Explain.

What would the yield to the lender be on the 30 year fixed loan, considering the 2 points which must be paid?

What would the outstanding balance of the 15 year fixed loan be after 5 years?

Assume the loan amount is the same as the fixed rate loan above. You wonder if an adjustable rate mortgage might be beneficial. You find a 3/2 product which you want to pursue. Initial rate: 3% margin .25%, 30 year term. End of three years, Index rises to 4.5%, margin continues. End of five years, Index rises to 5.0% margin continues. Answer these questions, show your work: What is the monthly payment for the interval which begins at the end of the initial period of the loan? What is the monthly payment for the interval which begins at the end of the first two-year interval of the loan?

Reference no: EM132024329

Questions Cloud

Determine which program evaluations are most useful : As a human services administrator, you need to determine which program evaluations are most useful. Much depends on the type of organization and the nature.

What is the expected dividend in each of next three years : You expect the dividend to grow steadily at a rate of 4% per year. What is the expected dividend in each of the next 3 years?

Differences in public and private sectordismissal practices : In your own words, discuss the differences between public and private sector dismissal practices. To what extent are these practices impacted by collective.

Conditional use permit for day care center on property : You would like it to be changed to High Density Residential zoning with a conditional use permit for a day care center on the property. What should you do?

What is initial monthly payment in each of respective loans : What is the initial monthly payment in each of the respective loans? Compare the amount of interest which would be paid on the 30 year vs. the 15 year loan.

Describe the company you will be using for your project : Describe the company you will be using for your project, and provide the name and contact information for the human resource director or other manager.

What is the break-even exchange rate : What is the break-even exchange rate? What is the maximum amount they could realize if the exchange rate moves against them?

What is the annual deposit required : What is the annual deposit required, if interest rate is 10%?

Assuming that pricing is by no-arbitrage model : How much should Cherie expect to pay for the desired option, assuming that pricing is by a no-arbitrage model?

User Account

All Pages