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What is the yield on the following 1 - year adjustable rate mortgage? What is the lenders expected yield ( assume a holding period of
What is the yield on the following year adjustable rate mortgage?
What is the lenders expected yield assume a holding period of term for the following loan if Year Treasury yields are expected to be today, months from now, months from now, and thereafter?
ARM description
Rate resets every year.
Fully adjusted rate Index Margin
Margin
Index Year Treasury yield at reset date.
Lifetime Cap of
Per Period change cap of percentage points bps
No other caps, floors, or max adjustments.
Teaser rate of
year loan with no points or fees.
Loan amount $
Fill out this table:
Mortgage Interest Rate Fully Adjusted Rate Index Margin
M
M
M
M
Find the payments:
Months :
Months :
Months :
M :
Calculate the rate of return for the lender:
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