Question

You have decided to buy a 2,000 square-feet house in Grapevine, close to a good public...

You have decided to buy a 2,000 square-feet house in Grapevine, close to a good public school. The average price in the area is $150 per square feet. The bank will finance 80% of the house value, so you need savings for the 20% down payment. You sign a 20 years 3/1 adjustable rate mortgage (ARM), which carries a 2.8% fixed rate for the first 3 years, and then (after 3 years) is adjusted to the 1-year LIBOR + 0.75 %. Question: How much are your monthly payments after the third year (when the loan is renegotiated) if the LIBOR is 3%?

$1,406.8

$1,307.1

$1,542.1

$1,485.7

$1,429.2

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2.   Suppose you have decided to buy a house. The mortgage is a 30-year mortgage with...
2.   Suppose you have decided to buy a house. The mortgage is a 30-year mortgage with an interest rate of 7%, compounded monthly. You borrow a total of $250,000. Given this, by the time you pay off the loan, how much in total (interest + principal) would the house cost you? (20 pts) 3.   How, reconsider the previous problem. Suppose you pay the mortgage according to those specifications (7% APR, monthly) for the first 10 years, but then you refinance...
You have decided to become a student landlord and plan to buy a house  for $920,000. You...
You have decided to become a student landlord and plan to buy a house  for $920,000. You parents have agreed to supply $200,000 to be used as a down payment, leaving $720,000 to be financed by means of a mortgage. The mortgage broker has quoted 5.25% quoted rate based on a 25-year amortization, which will be compounded semi-annually in accordance with Canadian law. Required: a) What would be the amount of monthly payments on the mortgage? b) What would be the...
Suppose you have decided to buy a house. The mortgage is a 30-year mortgage with an...
Suppose you have decided to buy a house. The mortgage is a 30-year mortgage with an interest rate of 7%, compounded monthly. You borrow a total of $250,000. Given this, by the time you pay off the loan, how much in total (interest + principal) would the house cost you?
You have decided to purchase a new house at the seaside. To finance the purchase, you...
You have decided to purchase a new house at the seaside. To finance the purchase, you have arranged for a 30-year mortgage loan for 80 percent of the $3,500,000 purchase price. The monthly payment on this loan will be $17,500. What is the APR on this loan? The EAR?
A home buyer bought a house for $245,000. The buyer paid 20 percent down but decided...
A home buyer bought a house for $245,000. The buyer paid 20 percent down but decided to finance closing costs of 3 percent of the mortgage amount. If the borrower took out a 30-year fixed-rate mortgage at a 5 percent annual interest rate, how much interest will the borrower pay over the life of the mortgage? SHOW IN EXCEL PLEASE
You are planning to purchase a house for $180,000. You will pay 20% down payment and...
You are planning to purchase a house for $180,000. You will pay 20% down payment and take a mortgage loan for the remaining 80%. You could get a 3/1 ARM amortized over 15 years at 3.9 % or a fixed 15 year FRM loan at 5.3%. The expected interest rate of the ARM from years 4 to 5 is 7.5%. You will live in the house for five years, and after that you expect to sell the house for $200,000...
You want to buy a house that costs $320,000. You will make a down payment equal...
You want to buy a house that costs $320,000. You will make a down payment equal to 20 percent of the price of the house and finance the remainder with a loan that has an interest rate of 4.55 percent compounded monthly. If the loan is for 30 years, what are your monthly mortgage payments?
You want to buy a house that costs $255,000. You will make a down payment equal...
You want to buy a house that costs $255,000. You will make a down payment equal to 20 percent of the price of the house and finance the remainder with a loan that has an interest rate of 5.37 percent compounded monthly. If the loan is for 30 years, what are your monthly mortgage payments?
You have decided to purchase a house for $225,000 and are evaluating your options for the...
You have decided to purchase a house for $225,000 and are evaluating your options for the mortage. Assume that your down payment will be 20% of the purchase price, payments will be made monthly, and the first payment will be made one month from today. a. What is the mortgage amount? (The amount you borrow) b. If you select the 30-year mortgage, the interest rate will be 4.5% annually. What is the monthly payment? c. Suppose that the bank is...
You are considering to buy a house. The current value of the house is $550,000 and...
You are considering to buy a house. The current value of the house is $550,000 and the 30-year mortgage rate based on your FICO score is 4.15%. You also decided to buy the house with a $50,000 down payment, What are the repayment of principal and remaining balance in a month 3 respectively? Please show your work. a. $701 and $499,299 b. $704 and $498,595 c. $706 and $497,889 d. $704 and $499,299
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT