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A borrower takes out a 25-year adjustable rate mortgage loan for $520,000 with monthly payments. The first 1 years of the loan have a teaser
A borrower takes out a 25-year adjustable rate mortgage loan for $520,000 with monthly payments. The first 1 years of the loan have a teaser rate of 1%, after that, the rate can reset with a 5% annual payment cap. On the reset date, the composite rate is 5%. What would the Year 2 (after 1 years; 24 years left) monthly payment be?
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