Question
Your mortgage has 20 years left and has an APR of 6.712% with monthly payments of $1449. Note that, APR DOES NOT compound over time.
Your mortgage has 20 years left and has an APR of 6.712% with monthly payments of $1449. Note that, APR DOES NOT compound over time.
a. What is the outstanding balance?
b. Suppose you cannot make the mortgage payment and you are in danger of losing your house to foreclosure. The bank has offered to renegotiate your loan. The bank expects to get $143,395 for the house if it forecloses. They will lower your payment as long as they will receive at least this amount (in present value terms). If current 20-year mortgage interest rates have dropped to 4.363% (APR), what is the lowest monthly payment you could make for the remaining life of your loan that would be attractive to the bank?
EXCEL working out format.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
States And The Reemergence Of Global Finance
Authors: Eric Helleiner
1st Edition
0801428599, 978-0801428593
