Question
1. Carla is taking an Interest Only loan to purchase a $400343 property with 0.85 (85%) LTV. The loan is issued for 15 years with
1. Carla is taking an Interest Only loan to purchase a $400343 property with 0.85 (85%) LTV. The loan is issued for 15 years with monthly payments and has a fixed interest rate at 2%. Under this mortgage contract, what will be Carla's payment in the first month of the loan? State your answer as a number rounded to the nearest cent (e.g. if your answer is $1,000.568, write 1000.57).
2. Five years ago Liliana took out a 30 year 5/1 Hybrid ARM loan with monthly payments. The initial rate on this loan is 4% and it resets to LIBOR plus a margin of 160bps. Suppose the remaining balance after five years of payments is $278052 and the LIBOR rate at the first reset is 3%. What will be Liliana's new monthly payment during 6th year of the loan? Express your answer as a number rounded to the nearest cent (e.g. if you find that the payment is $600.0697, then write 600.07).
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