Question
A mortgage banker is originating a level-payment mortgage with the following terms: Annual interest rate: 9.0% Loan term: 15 years Payment frequency: Monthly Loan amount:
A mortgage banker is originating a level-payment mortgage with the following terms:
| Annual interest rate: | 9.0% |
|---|---|
| Loan term: | 15 years |
| Payment frequency: | Monthly |
| Loan amount: | $ 160,000 |
| Up-front financing costs (including discount points) paid to lender: | $ 2,000 |
| Up-front financing costs paid to third parties other than the lender: | $ 2,000 |
Required:
- Calculate the annual percentage rate (APR) for Truth-in-Lending purposes.
- Calculate the lenders yield with no prepayment.
- Calculate the lenders yield with prepayment at the end of five years.
- Calculate the effective borrowing cost with prepayment at the end of five years.
Note: For all requirements, do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).
Annual Percentage Rate %
Lenders yield with no prepayment %
Lenders yield with prepayment %
Effective borrowing cost %
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Use The News To Separate The Noise From The Investment Nuggets And Make Money In Any Economy
Authors: Maria Bartiromo
1st Edition
0061873489
