Question
A borrower has taken out a 700,000, 5/1 ARM. The term on this 5/1 ARM is 30 years with monthly payments. The initial rate of
A borrower has taken out a 700,000, 5/1 ARM. The term on this 5/1 ARM is 30 years with monthly payments. The initial rate of 3% is locked in for five years. Calculate the new monthly payment after recasting the loan (i.e., after the reset) assuming the interest rate after the initial lock period is 5%. Round to the nearest dollar - e.g. 2370.
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International Finance Putting Theory Into Practice
Authors: Piet Sercu
1st edition
069113667X, 978-0691136677
