What is the yield on a $100,000 adjustable-rate mortgage loan? The starting interest rate is 9%, 30-year term, adjustment interval is 1 year. The margin over the index is 2%. There is a NO payment or interest rate cap. No points or fees charged at origination. The loan is repaid at the end of year 5. The index rates are provided in the excel workbook below. Use this excel workbook to help you solve this problem: Ch5 homework ARMS Q2 Workbook.xlsx O 12.11% O 14.08% O 12.68% O 13.84% O 13.32% - x B F D E Loan assumptions Amount $100,000 Initial rate 9.00% Annual Payment cap 5.00% Term 30 years Payments per year 12 Margin 2.00% Points 0.00% Chapter 5 ARM with Payment Cap What is the yield on: Loan Amount - $100,000 Starting Rate = 9%, margin is 2% .Term 30 Years Adjustment Interval - 1 Year .Payment Cap = 5% No points .Loon is repaid at end of year 5 Negative amortization is allowed Loan schedule Capped Payment Unrestricted Payment Year Index Rate Balance Cash flow (100,000 9,655 9.00% 804.62 804 62 99,317 10.00% 13.00% 15.00% 10.00% Yield wla casadament -90.34% Year Index Rate Unrestricted Payment Capped Payment Balance Cash flow 9.00% 804.62 804 62 99,317 (100,000) 9,655 1 2 3 4 5 10.00% 13.00% 15.00% 10.00% Yield with earned payment -90.34% What is the yield on a $100,000 adjustable-rate mortgage loan? The starting interest rate is 9%, 30-year term, adjustment interval is 1 year. The margin over the index is 2%. There is a NO payment or interest rate cap. No points or fees charged at origination. The loan is repaid at the end of year 5. The index rates are provided in the excel workbook below. Use this excel workbook to help you solve this problem: Ch5 homework ARMS Q2 Workbook.xlsx O 12.11% O 14.08% O 12.68% O 13.84% O 13.32% - x B F D E Loan assumptions Amount $100,000 Initial rate 9.00% Annual Payment cap 5.00% Term 30 years Payments per year 12 Margin 2.00% Points 0.00% Chapter 5 ARM with Payment Cap What is the yield on: Loan Amount - $100,000 Starting Rate = 9%, margin is 2% .Term 30 Years Adjustment Interval - 1 Year .Payment Cap = 5% No points .Loon is repaid at end of year 5 Negative amortization is allowed Loan schedule Capped Payment Unrestricted Payment Year Index Rate Balance Cash flow (100,000 9,655 9.00% 804.62 804 62 99,317 10.00% 13.00% 15.00% 10.00% Yield wla casadament -90.34% Year Index Rate Unrestricted Payment Capped Payment Balance Cash flow 9.00% 804.62 804 62 99,317 (100,000) 9,655 1 2 3 4 5 10.00% 13.00% 15.00% 10.00% Yield with earned payment -90.34%
