3. A borrower has secured a 30-year, $107,000 loan at 6% with monthly payments. Fifteen years later, an investor wants to purchase a loan from a lender. If market interest rates are 7%, what would the investor be willing to pay for the loan (assuming the investor believes that all remaining payments will be paid as scheduled)?

4. Mr. Fisher has built several houses and is offering mortgage rates of 4% with a 15-year term to prospective buyers. Investors are willing to buy the mortgage at 10.75%. If a house is sold for $383,000 with a 90% loan, how much would Mr. Fisher lose by selling the mortgage to an investor? Hint: What is the difference between the amount borrowed and how much an investor would be willing to pay for the loan.

5. What is the effective cost of a combination of an 80% mortgage at 3.5% and a second mortgage (for 10% of the purchase price) at 4.5%? Both mortgages carry a 30-year term and have no points/closing costs.