Question

In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM, a lender...

In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM, a lender agrees to pay the homeowner a monthly payment, or annuity, and expects to be repaid from the homeowner's equity when he or she sells the home or obtains other financing to pay off the RAM. Consider a household that owns a $140,000 home free and clear of mortgage debt. The RAM lender agrees to a $100,000 RAM for 10 years at 6 percent. Assume payments are made monthly, at the end of each month to the homeowner.

Calculate the amount of the loan balance at the end of Year 9 represents principal.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Monthly payment= $1,110.21

Principal outstanding at the end of year 9= $12,899.40

Calculation as below:

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Need detailed answer with steps 37. In a fixed-term, level-payment reverse mortgage, sometimes called a reverse...
Need detailed answer with steps 37. In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM, a lender agrees to pay the homeowner a monthly payment, or annuity, and expects to be repaid from the homeowner’s equity when he or she sells the home or obtains other financing to pay off the RAM. Consider a household that owns a $150,000 home free and clear of mortgage debt. The RAM lender agrees to a $100,000 RAM for...
Be sure to show step by step explanation by using inputs ( NV, I,pmt,Fv,I/y) financial calculator...
Be sure to show step by step explanation by using inputs ( NV, I,pmt,Fv,I/y) financial calculator In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or RAM, a lender agrees to pay the homeowner a monthly payment, or annuity, and expects to be repaid from the homeowner's equity when he or she sells the home or obtains other financing to pay off the RAM. Consider a household that owns a $150,000 home free and clear of mortgage...
An elderly couple owns a $300,000 home that is free and clear of mortgage debt. A...
An elderly couple owns a $300,000 home that is free and clear of mortgage debt. A reverse annuity mortgage (RAM) lender has agreed to a $250,000 RAM. The loan term is 12 years, the contract is 8.0% interest, and payments will be made at the end of each month. This will result in the lender paying the elderly couple $_______/month.
A borrower obtains a $150,000 reverse annuity mortgage with monthly payments over 10 years.  If the interest...
A borrower obtains a $150,000 reverse annuity mortgage with monthly payments over 10 years.  If the interest rate of the mortgage loan is 8%, what is the monthly payment received by the borrower? (A) $820 $863 $1,250 $1,820 Answer is A. PLease help me explain how they got it using financial calculator step
A borrower obtains a $150,000 reverse annuity mortgage with monthly payments over 10 years. If the...
A borrower obtains a $150,000 reverse annuity mortgage with monthly payments over 10 years. If the interest rate of the mortgage loan is 8%, what is the monthly payment received by the borrower? $820 $863 $1,250 $1,820 Correct answer is A monthly rate: 8/12=.66667% number of month = 10*12=120 monthly payment =future value/FVA .66667%,120                   = 150000/182.95             = $ 819.90 Per month (approx 820) **you can find future value annuity factor using financial calculator This explanation is so confusing...
You are purchasing a new home and need to borrow $325,000 from a mortgage lender. The...
You are purchasing a new home and need to borrow $325,000 from a mortgage lender. The mortgage lender quotes you a rate of 6.5% APR for a 30-year fixed-rate mortgage (with payments made at the end of each month). The mortgage lender also tells you that if you are willing to pay one point, they can offer you a lower rate of 6.25% APR for a 30-year fixed rate mortgage. One point is equal to 1% of the loan value....
You are a lender and have offered a borrower a $400,000 30-year fixed-rate mortgage loan at...
You are a lender and have offered a borrower a $400,000 30-year fixed-rate mortgage loan at 4.68% with monthly payments and fully amortize. The loan does not have any origination fees, but does have a 2% prepayment penalty during the loan's first 5 years. What would be the size of the prepayment penalty if the borrower repaid all remaining principal after the 46th payment? Please indicate your answer with two spaces right of the decimal.
An amortization table reports the amount of interest and principal contained within each regularly scheduled payment...
An amortization table reports the amount of interest and principal contained within each regularly scheduled payment used to repay an amortized loan. Example Amortization Schedule Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 2 3 Consider the amount of the interest payments included in each of the payments of an amortized loan. Which of the following statements regarding the pattern of the interest payments is true? The portion of the payment going toward interest is smaller in...
13. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals...
13. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You’ve decided to buy a house that is valued at $1 million. You have $200,000 to use as a down payment on the house, and want to take out a mortgage...
15. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals...
15. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You’ve decided to buy a house that is valued at $1 million. You have $250,000 to use as a down payment on the house, and want to take out a mortgage...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT