1. The incremental cost of borrowing may also be referred to as the marginal cost of borrowing. (True or False)

2. Which of the following is a form of owner financing? a. Land contract b. Jumbo mortgage c. Primary mortgage d. Package mortgage

3. You borrowed $385,000 with a 30- year,fully amortized mortgage ten years ago.The rate on the loan is 3.625%and you have made 120 payments on the loan.A mortgage broker has identified a lender that will refinance your existing loan with a new 20-year mortgage with a rate of 2.75%. The upfront refinancing costs consist of 1.85 points.What is NPV of the refinancing if you believe that you will repay the loan over its full term?

4. I just borrowed $267,000 at 2.125%for 15-years.My lender is looking to sell my loan and the market rate of interest is 1.53%.What is the market value of my loan assuming that it is repaid with a lump sum after 72 regular payments?

5. You are looking to purchase a house for $500,000 with either a 70%or 80%LTV loan (both 30-year mortgages). The 70%LTV loan has a rate of 2.75%with 1 point due at closing and the 80%LTV loan has a rate of 2.875%with 1.25 points due at closing.What the marginal borrowing cost of the 80%LTV loan in relation to the 70%LTV loan if you plan to pay off the loan after 48 months?

Please input your answer such that 14.54%would be 14.54.