Question

A borrower has secured a 30 year, $150,000 loan at 7% with monthly payments. Fifteen years later, the borrower has the opportunity to refinance with a fifteen year mortgage at 6%. However, the up front fees, which will be paid in cash, are $2,500. What is the return on investment if the borrower expects to remain in the home for the next fifteen years?

(A) 6.00% (B) 7.00% (C) 13.00% (D) 22.62% (E) 28.89%

Answer #1

Monthly rate=7%/12

Monthly Installment=PMT(C8,C9,C7)

Amount remain After 15 years=FV(C8,C10,C11,C7)

Monthly installment at Reduced rate=PMT(0.5%,C10,C12)

Saving In Interest=C11+C13

Rate of return=RATE(C10,C14,2500,0)*12

I hope my efforts will be fruitful to you

A borrower has secured a 30 year, $170,000 loan at 7% with
monthly payments. Fifteen years later, the borrower has the
opportunity to refinance with a fifteen year mortgage at 5.75%.
However, the up front fees, which will be paid in cash, are $3,500.
What is the return on investment if the borrower expects to remain
in the home for the next fifteen years?
20.50%
7.00%
29.12%
22.62%
28.89%

You have a 30 year $150,000 loan at 7% interest, monthly
payments. Fifteen years later, you have the chance to refinance
with a 15 year mortgage at 6%. However, the fees charged to make
this happen are $2500. What is the return on the $2500 "investment"
if you expect to remain in the home for the next 15 years? The
answer is 28.89% but im not sure how they got that.

1. A borrower has secured a 30 year, $100,000 loan at
8%. Fifteen years later, the borrower has the
opportunity to refinance with a fifteen year mortgage at
7%. However, the up-front fees, which will be paid in
cash, are $2,000.
What is the monthly payment on the initial
loan?
What is the loan balance at the time of
refinancing?
What is the return on investment if the borrower expects to
remain in the home for the next fifteen years after
refinancing? ...

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 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...

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$500,000 with monthly payments. The first year of the loan has a
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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 has a 30-year mortgage loan for $220,000 with an
interest rate of 4.5% and monthly payments. If she wants to pay off
the loan after 6 years, what would be the outstanding balance on
the loan? (Show work with calculator strokes)

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...

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
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lender are required to disclose to the borrower at the time of
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A borrower has a 30-year fully amortizing mortgage loan for
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principal?)

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