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I have completed numbers 2 - 5. Could please help me with questions 6 - 9 . this is all information for question... Thank you
I have completed numbers 2 - 5. Could please help me with questions 6 - 9 .
this is all information for question...
Thank you for your time
(2) A3/1 ARM is made for $250,000 at 7% with a 30-year maturity. Fixed payments are to be made monthly for three years, after which the interest rate will reset. --> If the loan is fully amortizing, what will be the monthly payments? Answer: 1663 (3) What will be the loan balance after three years? Answer: 241817 (4) What would new payments be beginning in year 4 if the interest rate fell to 6% and the loan continued to be fully amortizing? Answer: 1509 (5) Refer to the original question (2, 3), assuming the INTEREST RATE CAP of 2%, what would new payments be beginning in year 4 if the interest rate instead rose to 10%? Hint: the capped rate does not allow the new rate to go above certain point. Answer: 1990 (6) Using (5), what will be the loan balance after four years? Hint: Look at slide#29 & practice question#2 on the PPT lesson and the practice set on how to find the balance in any period other than after the first reset period. Answer: (7) Refer to the original question (2, 3), assuming the PAYMENT CAP of 15%, what would new payments be beginning in year 4 if the interest rate rose to 10%? Hint: unrestricted payment vs. capped payment. Answer: (8) Using (7), what will be the loan balance after four years? Hint: same approach as #6. Answer: (9) Refer to the original question (2), what would monthly payments be during the first three years if they were interest only? Answer: (2) A3/1 ARM is made for $250,000 at 7% with a 30-year maturity. Fixed payments are to be made monthly for three years, after which the interest rate will reset. --> If the loan is fully amortizing, what will be the monthly payments? Answer: 1663 (3) What will be the loan balance after three years? Answer: 241817 (4) What would new payments be beginning in year 4 if the interest rate fell to 6% and the loan continued to be fully amortizing? Answer: 1509 (5) Refer to the original question (2, 3), assuming the INTEREST RATE CAP of 2%, what would new payments be beginning in year 4 if the interest rate instead rose to 10%? Hint: the capped rate does not allow the new rate to go above certain point. Answer: 1990 (6) Using (5), what will be the loan balance after four years? Hint: Look at slide#29 & practice question#2 on the PPT lesson and the practice set on how to find the balance in any period other than after the first reset period. Answer: (7) Refer to the original question (2, 3), assuming the PAYMENT CAP of 15%, what would new payments be beginning in year 4 if the interest rate rose to 10%? Hint: unrestricted payment vs. capped payment. Answer: (8) Using (7), what will be the loan balance after four years? Hint: same approach as #6. Answer: (9) Refer to the original question (2), what would monthly payments be during the first three years if they were interest onlyStep by Step Solution
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