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Consider the following fixed-rate level-payment mortgage pass-through security: Total principal outstanding = $5,000,000 Weighted average mortgage (Note) rate = 8.25% Weighted average remaining maturity =
Consider the following fixed-rate level-payment mortgage pass-through security:
Total principal outstanding = $5,000,000
Weighted average mortgage (Note) rate = 8.25%
Weighted average remaining maturity = 30 years (360 months)
Pass-through rate=7.5%
- What is the scheduled monthly mortgage payment if there is no prepayment?
- Assume that you are an investor in the pass-through security. Assume 150 PSA pre-payment. Calculate the interest and scheduled principal repayment received by you for the sixth month.
- What is the amount of prepayment in the sixth month?
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