Dakota just purchased a house for $610,000. Dakota financed the purchase with a 7/1 loan that is fully amortizing, matures in 30 years, and involves monthly payments. When the annual interest rate resets, it will reset to LIBOR + 170 basis points with a maximum rate increase of 96 basis points per reset and a lifetime cap on the interest rate of 300 basis points over the initial annual interest rate. The initial annual interest rate on the loan is 3.72%. The loan involved points of 1.20%, other up-front financing costs paid to the lender of $3,100, and up-front financing costs paid to third party service providers of $4,800. The original LTV ratio for the loan is 81%.

a. What is the monthly payment associated with the mortgage loan in years 1 through 7?

b. What is the monthly payment associated with the mortgage loan in year 8 if LIBOR is 2.62% on the relevant date for resetting the rate?