Question
I am taking real estate finance and I am completely lost and not sure how to even start this problem 1) Consider the a loan
I am taking real estate finance and I am completely lost and not sure how to even start this problem
1) Consider the a loan with the following properties: ARM loan for $1,500. 10-year term and 10-year amortization schedule composite rate is the 10-year Treasury + 2% margin payments are due monthly loan interest has a 3-1-3 cap structure (3% initial cap, 1% annual cap, and 3% life cap). Beg. of Year 10-yr T-bill Loan Balance Applicable Interest Rate Monthly PMT 1 2.50% $1,500.00 2 3.00% 3 4.50% 4 6.00% 5+ 6.00%
A) Complete the amortization table above (note that the expected index rates are stated as of beginning of year):
B) Calculate the expected yield to lender if the loan is held to maturity:
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