Question
You have taken out a $475,000, 5/1 ARM. The initial rate of 3.75% (annual) is locked in for 5 years. Calculate the payment after recasting
You have taken out a $475,000, 5/1 ARM. The initial rate of 3.75% (annual) is locked in for 5 years. Calculate the payment after recasting the loan (i.e., after the reset) assuming the interest rate after the initial lock period is 4.25%. (Note: the term on this 5/1 ARM is 30 years.)
A.$1,685 B.$2,200 C.$1,888 D.$2,432
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
978-1259024979
