A borrower is seeking an FHA-insured loan. He will put the minimum 3.5% down payment and pay the upfront mortgage insurance fee of 1.75%. He will pay the annual mortgage insurance fee of .85% for the life of the loan. His interest rate is 5%, the APOR (as of the date the loan interest rate is locked) is 4.672%, and his APR for this loan is 6.474%. Is this a High cost mortgage loan or a Higher priced mortgage loan or both?

A borrower is seeking an FHA-insured loan. He will put the minimum 3.5% down payment and pay the upfront mortgage insurance fee of 1.75%. He will pay the annual mortgage insurance fee of .85% for the life of the loan. His interest rate is 5%, the APOR (as of the date the loan interest rate is locked) is 4.672%, and his APR for this loan is 6.474%. Is this a High cost mortgage loan or a Higher priced mortgage loan or both?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 4.5% for the 15-year mortgage and 5% for the 30-year mortgage. (Round your answers to the nearest dollar. Use this table, if necessary.) (a) What are the monthly principal and interest payments (in $) for each loan? 15-year mortgage $ 1530 30-year mortgage $ 1074 (b) What is the total amount of interest (in $) paid on each loan? 15-year mortgage $ _______ ?? 30-year mortgage $ _______??? (c) Overall, how much more interest (in $) is paid by choosing the 30-year mortgage? $
Robert plans to take out a mortgage for a house he just bought for $1 million. Bank A is offering a 25-year mortgage at an annual percentage rate (APR), compounded monthly, of 4.5% and a 25% down payment. Bank B is offering a 30-year mortgage at an APR, compounded monthly, of 4.8% and a 10% down payment. (a) Calculate the monthly payment under Bank A's terms. (b) Calculate the monthly payment under Bank B's terms.
Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 4.5% for the 15-year mortgage and 5% for the 30-year mortgage. (Round your answers to the nearest dollar. Use this table, if necessary.) (a) What are the monthly principal and interest payments (in $) for each loan? 15-year mortgage$ = 30-year mortgage$ = (b) What is the total amount of interest (in $) paid on each loan? 15-year mortgage$ = 30-year mortgage$ = (c) Overall, how much more interest (in $) is paid by choosing the 30-year mortgage? $
Show the first two lines of the amortization table for your new home mortgage, assuming a sellingprice of $118,500, a down payment of 6%, annual interest rate 5.3% compounded monthly, andmonthly payments on a 30-year mortgage. (Please help by solving through calculator)
Use PMT formula on the image uploaded to determine the regular payment amount, rounded to the nearest cent. The cost of a home is financed with a $150,000 20-year fixed-rate mortgage at 3.5%. a. Find the monthly payments and the total interest for the loan. b. Prepare a loan amortization schedule for the first three months of the mortgage. ______________________________________________________________ a. The monthly payment is $________.. (Do not round until the final answer. Then round to the nearest cent as needed.) - The total interest for the loan is $_______. (Use the answer from part a to find this answer. Round to the nearest cent as needed.) b. Fill out the loan amortization schedule for the first three months of the mortgage below. Payment Number Interest Principal Loan Balance 1 $ $ $ 2 $ $ $ 3 $ $ $ (Use the answer from part a to find these answers. Round to the…
2. Sue borrows $600,000 at 3.85%. The mortgage is for 30 years. A. What is the monthly payment? B. How much interest will be paid over the life of the loan? C. Recalculate the total interest rate if the rate changes from 3.85% to 6.85 %. What is the total interest paid over the life of the 6.85% loan?
Of the bank approves a mortgage of 240,000 for 30 years and at a rate of 6% what will the the annnual mortgage payment
Assume that you take out a 30-year mortgage (360 months) with a face value of $425,000 and a stated annual rate of 2.51%. Given this information, and assuming no prepayments, determine what percentage of your 153rd monthly payment will go towards interest. A) 51.15% B) 63% C) 53.37% D) 35.25% E) 41.06%
You plan to borrow $32,200 at an 8.2% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much interest would you be paying in Year 2? Oa. $5,755.17 Ob. $2,346.29 $2,384.99 Od. $2,640.40 O$6,227.10
Jamal has been approved for a $215,000 loan, 30- year mortgage with an APR of 4.3%. He made a 10% down payment and is closing on April 15th. How much should he expect to pay in prepaid interest at closing?
A couple borrows $300,000 at an APR of 4.8% compounded monthly on a 30-year mortgage with monthly payments of $1,574. (a) How much of the first payment goes to interest? (b) Find the total interest paid over the life of the loan. (c) After making their 70th payment, they refinance the loan at an APR of 3.6% compounded monthly for 15 years. The refinanced amount includes the unpaid balance from the original loan plus a refinance charge of $2,000. Find the new monthly payment. (d) Find the amount saved by refinancing.
Assume that you have taken out a 30-year mortgage of $240,000 and that your monthly payments are 1,853.90. What is your annual interest rate on the mortgage loan? (find the closest answer)8.55 % 8.61 % 8.89 % 9.1490 9.45%

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS