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Mr. Gregory White, Master's Degree

Category: Multiple Problems

Satisfied Customers: 5240

Experience: M.A., M.S. Education / Educational Administration

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Just need these 5 questions in 2 hours?A borrower takes

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Just need these 5 questions in 2 hours?A borrower takes out a "hybrid mortgage loan" for $200,000 with monthly payments. This loan combines elements of fixed-rate mortgage (FRMs) for periods of 2 years, after which interest rates are reset and the loan becomes an adjustable mortgage (ARM). The amortization period is 30 years. The first two years of the loan have a “teaser” rate of 4%. After that, the interest rate can reset with a 2% annual interest rate cap. Assume that on the reset date, the composite rate (i.e., the market index plus the margin) is 5%. What would the Year 3 monthly payment be? A. $955 B. $1,067 C. $1,186Given that every other factor is equal, which of the following ARMs will have the lowest expected interest rate? A. An ARM with payment caps and negative amortizatio B. An ARM with interest rate caps C. An ARM with longer Adjustment interval D. An ARM with no caps or limitationsTom wants to purchase a property for $300,000. He can borrow a 80% LTV fixed-rate loan, with 4.5% annual interest rate and a 3% origination fee. Or, he can borrow a 90% LTV fixed-rate loan, with 5.5% annual interest rate, and a 3% origination fee. Both loans have a 30 year amortization period. If he plans to prepay the loan at the end of 3rd year, what will be the incremental cost of borrowing for him to to borrow the additional 10% loan amount? A. 12.25% B. 14.47% C. 13.68% D. 10%Suppose you can get a loan with a below-market interest rate from a home builder. The fully amortizing FRM loan has 4% interest rate, 30 year amortization, $240,000 loan amount. If the home usually sells for $300,000, at what price should the homebuilder sell the home to you in order to earn a market return of 4.5% on the loan? Assume you will hold the loan for 30 years. A. $313,864 B. $320,489 C. $305,689 D. $329,092Peter took a fixed-rate, fully amortizing mortgage loan for a 5% interest rate for 10 years (monthly compounding loan), with the loan amount being $90,000. The lender allows him to pay $200 monthly payments for the first three year. Assume negative amortization is allowed. What will be the accrued interest or the amount of increased loan balance for the loan three years later from now? A. $6,567 B. $7,022 C. $6,782 D. $7,024