Question

Gilbert takes out a 23-year adjustable rate mortgage loan for $6,000,000 with monthly payments. The first two years of the loan have a “teaser” rate of 2%, after that, the rate can reset with a 2% annual rate cap. On the reset date, if the composite rate is 7%, what would the Year 3 monthly payment be?

a) $31,467.8 b) $32,768.6 c) $35,812.3 d) $42,327.9

Answer #1

A borrower takes out a 30-year adjustable rate mortgage loan for
$500,000 with monthly payments. The first year of the loan has a
“teaser” rate of 3%, after that, the rate can reset with a 7%
annual payment cap. On the reset date, the composite rate is 5%.
What would be the Year 2 monthly payment be?
Please show how to solve using a financial calculator.

A borrower takes out a 25-year adjustable rate mortgage loan for
$540,000 with monthly payments. The first 5 years of the loan have
a “teaser” rate of 4%, after that, the rate can reset with a 3%
annual rate cap. On the reset date, the composite rate is 6%. What
would the Year 6 (after 5 years; 20 years left) monthly payment
be?
Group of answer choices
A) $3,369.84
B) $3,407.02
C) none of the answers is correct
D) $3,235.05...

A customer would like to take out a 25-year adjustable rate
mortgage loan for $260,000 with monthly payments. The first two
years of the loan have a “teaser” rate of 4%, after that, the rate
can reset with a 2% annual rate cap. On the reset date, the
composite rate is 6%. What would the Year 3 monthly payment be?
$955
$1,567
$1,655
$1,586
Because of the rate cap, the payment would not change.

Mary takes out a 25-year mortgage of $280,000, to be repaid with
monthly payments, the first coming a month from now. If the annual
interest rate is 8.8% compounded monthly, what is the total amount
of interest that she’ll pay over the life of the loan, rounded to
the nearest dollar?

a borrower takes out a 30 year mortgage loan for $361,923 with
an interest rate of 6% and monthly payments. What portion (dollar
amount) of the first months payment would be applied to
interest

You are given that the teaser rate on a 1/1 ARM is 2.50%. The
mortgage has a margin of 2% above 1-year CMT, subject to a rate cap
5/2/5. Answer the following questions:
(i) What is the maximum rate the mortgage can reset to on its
first reset date?
(ii) The CMT is 2% at the time of the first reset and at the
time of the second reset it goes to 3.5%. What would the rate reset
to for...

1. One advantage of Adjustable Rate Mortgages (ARM) is that
a. lenders face lower levels of interest rate risk than a fixed
rate mortgage.
b. the outstanding loan balance can be adjusted regularly.
c. the default risk of borrowers is lower than under a fixed
rate mortgage.
d. All of the above.
2. Gilbert takes out a 23-year adjustable rate mortgage loan for
$6,000,000 with monthly payments. The first two years of the loan
have a “teaser” rate of 2%,...

You have a mortgage loan of $310,000 with monthly payments. The
monthly interest rate is 0.1%.
(a) Model the mortgage with a dynamical system, where your payment
is ? dollars per
month.
(b) If the payment is $1,800 per month, how much is still due
after 120 payments?
(c) What monthly payment ? will have the loan paid out in
exactly 25 years?

a borrower takes out a 15 year mortgage loan for 100,000 with an
interest rate of 5% plus 3 points. what is the effective annual
interest rate on the loan if the loan is carried 7 years.

Five years ago Lilian took out a 30 year 5/1 Hybrid ARM loan
with monthly payments. The initial rate on this loan is 2% and it
resets to LIBOR plus a margin of 150bps. Suppose the remaining
balance after five years of payments is $197,000 and the LIBOR rate
at the first reset if 4%. What will be Lilian's new monthly payment
during 6th year of the loan? Express your answer as a number
rounded to the nearest cent (e.g....

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