You plan to purchase a house for $166,000 using a 15-year mortgage obtained from your local bank. You will make a down payment of 15 percent of the purchase price. You will not pay off the mortgage early. Assume the homeowner will remain in the house for the full term and ignore taxes in your analysis. Your bank offers you the following two options for payment. Option 1: Mortgage rate of 7 percent and zero points Option 2: Mortgage rate of 6.75 percent and 3 points Which option should you choose? Option 1 None is the correct answer Option 2
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- You plan to purchase a house for $295000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price. You will not pay off the mortgage early. Your bank offers you the following two options for payment. Option 1: Mortgage rate of 5.35 percent and 1 point. Option 2: Mortgage rate of 5.25 percent and 2 points. Which option should you choose?You plan to purchase a house for $115,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price and monthlypayments. You will not pay off the mortgage early. a. Your bank offers you the following two options for payment: Option 1: Mortgage rate of 9 percent and zero points. Option 2: Mortgage rate of 8.85 percent and 2 points. Which option should you choose?You plan to purchase a house for $250,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price and monthly payments. You will not pay off the mortgage early. Your bank offers you the following two options for payment: Option 1: Mortgage rate of 3.75 percent and zero points. Option 2: Mortgage rate of 3.50 percent and 2 points. Which of the following is correct? Round your calculations/answers to two decimals. I. In exchange for $4,000 up front, Option 2 reduces your monthly mortgage payments by $28.14. II. The present value of the monthly savings is less than the points paid up front. III. Option 1 is the better choice. Formulas and Equations M = where P is principal, M is periodic payment, y interest rate, PVIFAny% = In period j, principal repayment is AMj = M Interest payment is is Ij = M[ ]=M - AMj Group of answer choices I only II only I and II only II and III only I, II, and III
- You plan to purchase a $100,000 house using a 30-year mortgage obtained from your local credit union. The mortgage rate offered to you is 8.25 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Calculate the amount of interest and, separately, principal paid in the 25th payment. (pls show solution)you are buying a house and will borrow $225,000 on a 30-year fixed reate mortgage with monthly payments to finance the purchase. your loan officer has offered you a mortgage with an APR of 4.3%. Alternatively, she tells you that you can “ buy down ” the interest rate to 4.05% if you pay points up front on the loan is 1 % ( one percentage point) of the loan value. you believe that you will live in the house for only eight years before selling the house and buying another house. this means that in eight years, you will pay off the remaining balance of the original mortgage. how many points, at most, would you be willing to pay to buy down the interest rate? Question) maximum points?You plan to use a 15 year mortgage obtained from a local bank to purchase a house worth $124,000.00. The mortgage rate offered to you is 7.75%. You will make a down payment of 20% of the purchase price. a. Calculate your monthly payments on this mortgage. List in a spreadsheet the cash flow the bank expects to receive from you. Submit the spreadsheet with your answers. b. Calculate the amount of interest and principal for the 60th payment. Show your work. c. Calculate the amount of interest and principal to be paid on the 180th payment. Show your work. d. What is the amount of interest paid over the life of this mortgage?
- You plan to purchase a $200,000 house using either a 30-year mortgage obtained from your local savings bank with a rate of 7.25 percent, or a 15-year mortgage with a rate of 6.50 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 in the monthly payment on the two mortgages?You plan to purchase a $350,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 5.50 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Construct the amortization schedule for the mortgage. How much total interest is paid on this mortgage? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))You plan to purchase a $400,000 house using either a 25-year mortgage obtained from your local savings bank with a rate of 8.40 percent, or a 10-year mortgage with a rate of 7.65 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 in the monthly payment on the two mortgages? (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. b. Interest under 10-year mortgage Interest under 25-year mortgage Difference in interest paid Monthly payment under 10-year mortgage Monthly payment under 25-year mortgage Difference in monthly payment
- Your credit score is in the range of 720-739 and you want to buy a house in Davis (CA). You have 20% down payment to put on a house that has a market value of $450,000. a) Use www.bankrate.com website to identify the bank with the most convenient APR for your 30- year fixed mortgage and accordingly calculate your annual payment. Ignore external and additional costs in your calculation that may vary from one bank to another b) After 20 years of annual payment, how much you should pay in lump sum to your bank to end up all your debts. Ignore penalties or any other additional cost c) According to your finance, your maximum annual payment for your mortgage cannot exceed $24,000. Under this condition, how much should be your minimum down payment for your mortgage?Assume that a broker agent introduces you to a local bank, and that bank offers you their lowest interest rate at 3.25% APR, with a 10-year fixed interest rate or 20-year fixed interest rate. 1) If you want a 10-year, fixed mortgage loan, find the monthly mortgage payment for a house that you will borrow $500,000 with no down payment. 2) Determine the total amount paid over the full term of the loan. 3) How much interest will be paid on the loan over the 10 years?You plan to purchase a S100,000 house using a 30-ycar mortgage obtained from your local credit union. The mortgage rate offered to you is 8.25 percent. You will make a down payment of 20 percent of the purchase price. 1. (LG 7-4) a. Calculate your monthly payments on this mortgage. b. Calculate the amount of interest and, separately, princi- pal paid in thc 25th payment. e. Caleulate the amount of interest and, separately, princi- pal paid in the 225th payment. d. Calculate the amount of interest paid over the life of this mortgage.