Question
A mortgage loan of $200,000 has just been made on a property valued at $250,000. The interest rate is 5% with 2 points with a
A mortgage loan of $200,000 has just been made on a property valued at $250,000.
The interest rate is 5% with 2 points with a 10 year balloon. Monthly amortization
payments are based on a 30 year maturity. The mortgage also carries a 2%
prepayment penalty.
a. What is the indicated loan-to-value ratio?
b. What is the monthly mortgage payment?
c. How much interest is paid in the fourth year?
d. What is the dollar amount of the balloon payment?
e. If the mortgage is paid off after 6 years what will the effective yield be?
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Contemporary Business Mathematics with Canadian Applications
Authors: S. A. Hummelbrunner, Kelly Halliday, K. Suzanne Coombs
10th edition
133052311, 978-0133052312
