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You are a new loan officer with Alpha Mortgage, and the manager of the loan department has just presented a problem to you. He
You are a new loan officer with Alpha Mortgage, and the manager of the loan department has just presented a problem to you. He is unable to complete the AP calc adjustable rate mortgage that a borrower applied for yesterday. The loan features initial payments based on a 5 percent rate of interest at loan dosing. The current c the loan is 7 percent. Two discount points have been paid by the borrower. Any difference between borrower payments and the interest payment required at the co be accrued in the mortgage balance in the form of negative amortization. The mortgage amount desired by the borrower is $72,500 for a 30-year term. Determine the APR assuming that the ARM is made with a 2 percent annual and 5 percent over-the-life interest rate cap. (Do not round intermediate calculation
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