Question
38) How much interest would be paid on a five-year adjustable mortgage that is interest only. The principal amount is 300,000. The teaser rate is
38) How much interest would be paid on a five-year adjustable mortgage that is interest only. The principal amount is 300,000. The teaser rate is 1.5 percent. The index for the rate adjustments are as follows: 3%,4.5%, 6%,8%. The margin is 3%. The annual cap is 2% and the maximum lifetime cap is 8%.
His original monthly installments will be 939.44 and after 10 years (240 installments), the outstanding mortgage will be $142,348.61. House prices have increased now by 6% so total value now = 318,000 and outstanding loan after 10 years = 142,348. So net proceeds now = 175,651
In calculating a balloon payment from a lenders perspective, the signs for the loan amount, payment and balloon are:
A. Negative, negative, positive | ||
B. Positive, positive, negative | ||
C. Negative, positive, positive | ||
D. Positive, positive, positive, positively. |
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