Assume the following for a one-year rate adjustable rate mortgage loan that is tied to the one-year
Question:
Loan amount: ............... $150,000
Annual rate cap: .............. 2%
Life-of-loan cap: .............. 5%
Margin: ................... 2.75%
First-year contract rate: ............ 5.50%
One-year Treasury rate at end of year 1: ...... 5.25%
One-year Treasury rate at end of year 2: ...... 5.50%
Loan term in years: .............. 30
Given these assumptions, calculate the following:
a. Initial monthly payment
b. Loan balance end of year 1
c. Year 2 contract rate
d. Year 2 monthly payment
e. Loan balance end of year 2
f. Year 3 contract rate
g. Year 3 payment
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a The first year payment based on an interest rate of 55 percent is 85168 as calculated ...View the full answer
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