Question

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 $350,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $650,000 mortgage, and is offering a standard 30-year mortgage at a 10% fixed nominal interest rate (called the loan’s annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate used to four decimal places.)

Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a 15-year, $650,000 loan at a fixed nominal interest rate of 10% (APR), then the difference in the monthly payment of the 15-year mortgage and 30-year mortgage will be ?(Note: Round the final value of any interest rate used to four decimal places. )

It is likely that you won’t like the prospect of paying more money each month, but if you do take out a 15-year mortgage, you will make far fewer payments and will pay a lot less in interest. How much more total interest will you pay over the life of the loan if you take out a 30-year mortgage instead of a 15-year mortgage?

$1,019,121.41

$1,098,740.27

$939,502.55

$796,188.60

Which of the following statements is not true about mortgages?

Every payment made toward an amortized loan consists of two parts—interest and repayment of principal.

If the payment is less than the interest due, the ending balance of the loan will decrease.

The ending balance of an amortized loan contract will be zero.

Mortgages are examples of amortized loans.

Answer #1

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...

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 $300,000 to use as a down payment on the house, and want to
take out a mortgage...

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...

You are considering the purchase of a $600,000 house using a
regular fixed rate mortgage loan with a 20% down payment; what is
the monthly payment (not including taxes and insurance) using a
30-year (5.0%), 20-year (4.50%), and a 15-year (4.00%)? How much
total interest would you pay using the three different loans over
the course of the loan? What are the pros and cons of using a 5/1
adjustable rate mortgage?

You take out standard 30-year mortgage with fixed monthly
payments to purchase your house. The mortgage is for $250,000 with
a nominal annual rate of 4.6% (Monthly compounding). Each month,
you send in a check for $1,403.81, which is above the required
payment, where the excess payment directly reduces the outstanding
balance each month. What portion of your payments in months 25-36
go towards interest?

I have a choice between two different fixed-rate mortgages when
I purchase my $150,000 house. One is a 20-year mortgage with a
quoted rate of 4.375% and the other is a 30-year mortgage with a
quoted rate of 4.5%. Both rates are monthly compounded, and both
mortgages require equal monthly payments. What is the required
monthly payment of each loan? How much of a down payment would I
have to make if I wanted the 20-year loan’s payment to be...

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 plan to purchase a $390,000 house using either a 30-year
mortgage obtained from your local savings bank with a rate of 8.50
percent, or a 15-year mortgage with a rate of 7.55 percent. You
will make a down payment of 20 percent of the purchase price. a.
Calculate the amount of interest and, separately, principal paid on
each mortgage. What is the difference in interest paid? b.
Calculate your monthly payments on the two mortgages. What is the
difference...

You are taking out a $13395 loan. It will be amortized with
fixed payments over 10 years. It is to be paid quarterly and the
APR is 4%.
What is the interest payment on the loan in the second
quarter?

PLEASE ANSWER C!!!
Bob & Betty Homebuyers want to make an offer on this
property at the list price. Bob earns $48,000 per year and Betty
earns $54,000 per year. They have very good credit. Their monthly
payments are $200 for student loans, $350 for their car payment and
minimum credit card payment of $50. They have savings of $125,000.
The balance of their student loans is $40,000.
Insurance on this house will cost them $900 per year. Property
taxes...

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