SITUATION FOR QUESTIONS 7 - 12

A house is selling for $175,000 and your bank makes you the following offer: 5.36% interest per year compounded monthly, $35,000 down payment, 20 year amortization period.

$____________7. What is the amount of your monthly payment?

%____________8. What is the bank's loan to value ratio?

$____________9. If you sell the house at the end of 10 years, what is your mortgage balance at that time? (What will you owe the bank.)

$___________10. If you wish to reduce the term of the loan from a 20 year to 10 year amortization, calculate your payment based upon 10 year amortization?

$___________11. If you sell the house after 5 years for $225,000 how much will you have left, in cash, after paying off your mortgage, assuming you made your monthly payments when due. Assume no expenses or costs in selling the house?

$___________12. If you could come up with an additional $10,000 for a down payment how much would your monthly payment decrease?