QUESTION 4: Julia and Justin Roberts are planning to buy a bigger house in Pickering for $900,000. Property taxes are currently $9,000 per year on this house. Their current house is fully paid and they can sell it for $500,000. The legal, realtor and moving expenses would be $30,000. Currently mortgage rate for a five year term is 4% per year compounded semiannually. Their combined gross income is $200,000 per year. They will be paying off a furniture loan for the next 3 years at a rate of $500 per month, and a car loan for 4 years at a rate of $600 per month. a. How much will their weekly mortgage payment be if they take a 5-year term loan, amortized over 15 years? Assume 52 weeks in a year. b. Will they qualify for a conventional mortgage loan? c. What will be the balance outstanding after 3 years? d. At the end of 5 years, they can change the terms of the mortgage loan. Suppose that the interest rate is 3.5% after five years, and they change to monthly payments of $4,000. How long would it take them to pay off the loan? e. Suppose 3 years after the initial mortgage loan, interest rates declined to 2% for a 2-year term. For a penalty payment equal to the next 13 weeks of interest added to the principal, Julia & Justin can switch to this rate for the two years remaining in the term of the mortgage loan, while continuing to make the same weekly payment as in a. Thus, they would pay off the principal faster for 2 years, until the renewal date. At that time, the terms would again be open, and the bank would adjust the interest rate to market rate, should they make the switch