The amount of down payment one makes on a home directly affects the size of the monthly payments
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1) The amount of down payment one makes on a home directly affects the size of the monthly payments a. True b. False |
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2) A monthly payment of $ 850 on a 30 year $ 80,000 mortgage results in a total cost of interest of $ 306,000. a. True b. False |
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3) What are the points on a mortgage? |
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- How is a home mortgage an example of Time Value of Money? What would you expect the impact of varying terms (years needed to pay off the loan) and rates to be using TVM rules? Why do homeowners sometimes refinance their mortgages?When you use a mortgage to purchase a home, the lending institution effectively owns the home. You buy back part ownership in the home with each monthly payment. The part you have bought back is your equity in the home. If the mortgage amount is P dollars, the monthly interest rate is r as a decimal, and the term of the mortgage is t months, then your equity after k payments is E(k) = P((1 + r)k − 1) (1 + r)t − 1 dollars. In this exercise, assume that the mortgage amount is $150,000, the APR is 6% so r = 0.06 12 , and the term of the loan is 30 years (360 months). (a) Find a formula for the equity. E(k) =A. what is the Monthly Payment ? what is the total interest paid ? B. time to pay off mortgage if extra $100 is added ? total interest saved ? I will rate thakn you!
- a. Find the required down payment. b. Find the amount of the mortgage. c. How much must be paid for the one point at closing? (Round to the nearest dollar as needed.) d. Find the monthly payment (excluding escrowed taxes and insurance). (Round to the nearest dollar as needed.) e. Find the total cost of interest over 30 years. (Round to the nearest dollar as needed.)Suppose you earn a gross income of $2,920.00 per month and apply for a mortgage with a monthly PITI of $908.12. You have other financial obligations totaling $169.36 per month. If the lending ratio guidelines are as given in the table below, what type of mortgage, if any, would you qualify for? Mortgage Type Housing Expense Ratio Total Obligations Ratio FHA 29% 41% Conventional 28% 36% A. FHA only B. Conventional only C. FHA and Conventional D. None of the above(Note, this is how mortgage payments are calculated.) Payments on a loan are amortized when a fixed amount is paid at the end of each time period in order to pay off both the principle of the loan and the interest accumulated up to that point. At the end of each period, interest is charged on the amount still owing. Let P be the initial amount of the loan, and i > 0 be the interest rate charged (per period), R the size of the per period payment (paid at the end of each period), and Pt the amount that is still owed after t periods. So P0 = P(a) Find P1.(b) Find a first order linear recurrence for Pt.(c) Show that the solution to your recurrence relation isPt = (P-(R/i))(1+i)^t + (R/i)
- Construct a differential equation for the changing mortgage balance. (Equation Must include r, A, P, and dA/dt)Relevant information: monthly mortgage payment (M) is composed of taxes and insurance (TI), and principle and interest (P). So, M=TI + P (TI goes into escrow account). Mortgage rate, r, is APR divided monthly (0.05/12). t is time in months, A(t) is the mortgage balance after t months of payments. the rate of change of A(t) is the difference between interest incurred and P (the portion of the monthly payment that does not go into Escrow account).pls refer to the image attached, 1. suppose that you have the capacity to pay, would you rather borrow a loan that is amortized monthly, or one that is amortized quarterly? 2. what is your considerations when availing a loan? (quantitative or qualitative considerations) Discuss.Suppose you earn a gross income of $2,915.00 per month and apply for a mortgage with a monthly PITI of $900.74. You have other financial obligations totaling $174.90 per month. If the lending ratio guidelines are as given in the table below, what type of mortgage, if any, would you qualify for? Mortgage Type Housing Expense Ratio Total Obligations Ratio FHA 29% 41% Conventional 28% 36% O FHA only O Conventional only O FHA and Conventional O None of the above
- When you purchase a home by securing a mortgage, the total paid toward the principal is your equity in the home. The graph in the figure below shows for a certain 30-year mortgage the equity, in dollars, accrued after a given number of monthly payments. Equity in dollars 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 60 120 180 240 300 360 Number of monthly payments (a) Is the graph concave up or concave down? concave down concave up (b) The graph is increasing. What does the concavity you identified in part (a) say about how the equity grows? Equity is not changing. Equity is increasing at a decreasing rate. Equity is decreasing at an increasing rate. Equity is decreasing at a decreasing rate. Equity is increasing at an increasing rate. (c) Use the graph to estimate the amount of the mortgage. $ 300000 XConsider a home mortgage of $ at a fixed APR of % for years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest.Which one of the following statements about a fixed-rate mortgage (FRM) loan is correct? a. The monthly payment of the FRM loan changes over the life of the loan. b. Each monthly payment contains the interest payment component and principal repayment component. The size of each component remains unchanged over the life of the FRM loan. c. Each monthly payment contains the interest payment component and principal repayment component. As time goes by, the size of the interest component increases and the size of the principal component decreases, but the sum of the two components remain unchanged. d. Each monthly payment contains the interest payment component and principal repayment component. As time goes by, the size of the interest component decreases and size of the principal component increases, but the sum of the two components remain unchanged.