Question

A while ago, a couple purchased a home with a sales price of $890,000, making a...

A while ago, a couple purchased a home with a sales price of $890,000, making a 20% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.5% for the first seven years. Now that the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance into a fixed rate 15-year mortgage at 4.9%, allowing them to pay it off before they retire. What will their new monthly payments be? Assume there are no costs associated with the refinance.

Answer = $ (Round to the nearest cent/penny)

Note: In many adjustable rate mortgages, there is a period of time where the interest rate is fixed. After that time, the rate can adjust regularly based on economic conditions and bank policy. This means the monthly payments could change dramatically once the "fixed rate" period, in this case the first 7 years, is over.

Please show your work

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Purchase consideration less: Down Payment @ 20% Amount Loan $ $ $ 8,90,000 1,78,000 7,12,000 Rate of Interest Tenure of Loan

$6,79,357.93 $ 1,981.46 $ $6,78,142.19 $ 1,977.91 $ $6,76,922.91 $1,974.36 $ $6,75,700.07 $ 1,970.79 $ $6,74,473.66 $ 1,967.2

$6,23,747.82 $1,819.26 $ $6,22,369.89 $1,815.25 $ $6,20,987.93 $ 1,811.21 $ $6,19,601.95 $1,807.17 $ $6,18,211.93 $1,803.12 $

Hope it helps, In case of any doubt or Issue, Please comment below

Add a comment
Know the answer?
Add Answer to:
A while ago, a couple purchased a home with a sales price of $890,000, making a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • A while ago, a couple purchased a home with a sales price of $890,000, making a...

    A while ago, a couple purchased a home with a sales price of $890,000, making a 15% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.2% for the first seven years. Now that the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance into a fixed rate 15-year mortgage at 4.9%, allowing them to pay it off before they retire. What will their new monthly...

  • A while ago, a couple purchased a home with a sales price of $790,000, making a 10% down payment and financing the rest...

    A while ago, a couple purchased a home with a sales price of $790,000, making a 10% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.6% for the first six years. Now that the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance into a fixed rate 15-year mortgage at 4.6%, allowing them to pay it off before they retire. What will their new monthly...

  • ICS FOR MANAGE ile 1:30% 5. A couple purchased a house and signed a mortgage contract...

    ICS FOR MANAGE ile 1:30% 5. A couple purchased a house and signed a mortgage contract for $350 000 to be paid in monthly installments over 25 year, at 3.5%. The contract stipulates that after 5 years the mortgage will be renegotiated at a new prevailing rate of interest. Calculate: (a) Monthly payment for initial 5 years: (b) The outstanding principal after 5 years (c) The new payment (now every second week) after 5 years at 42%. NOTE: mortgages rates...

  • Q Searc Ch 05: Assignment - Making Automobile and Housing Decisions Term Answer Description Fixed-rate mortgage...

    Q Searc Ch 05: Assignment - Making Automobile and Housing Decisions Term Answer Description Fixed-rate mortgage A. This mortgage allows borrowers to make smaller-but gradually and constantly increasing-payments for the first three to five years. At the end of this period, the payments then stabilize at the higher level and are repaid over the remaining life of the loan. Interest-only mortgage B. Over the life of this mortgage, the interest rate and the monthly payment are fixed. VA loan guarantee...

  • 5 years ago, Jimmie borrowed $281,900 to purchase a house in Sandy Lake. At the time,...

    5 years ago, Jimmie borrowed $281,900 to purchase a house in Sandy Lake. At the time, the quoted rate on the mortgage was 6 percent, the amortization period was 25 years, the term was 5 years, and the payments were made monthly. Now that the term of the mortgage is complete, Jimmie must renegotiate his mortgage. If the current market rate for mortgages is 7 percent. What is Jimmie’s new monthly payment? (Round effective monthly rate to 6 decimal places,...

  • Five years ago you took out a​ 5/1 adjustable rate mortgage and the​ five-year fixed rate...

    Five years ago you took out a​ 5/1 adjustable rate mortgage and the​ five-year fixed rate period has just expired. The loan was originally for $ 294,000with 360 payments at 4.2 % APR, compounded monthly. a. Now that you have made 60 ​payments, what is the remaining balance on the​ loan? b. If the interest rate increases by1 %​, to 5.2 % APR, compounded​ monthly, what will be your new​ payments? a. Now that you have made 60 ​payments, what...

  • 5 years ago, Jimmie borrowed $281,900 to purchase a house in Sandy Lake. At the time,...

    5 years ago, Jimmie borrowed $281,900 to purchase a house in Sandy Lake. At the time, the quoted rate on the mortgage was 6 percent, the amortization period was 25 years, the term was 5 years, and the payments were made monthly. Now that the term of the mortgage is complete, Jimmie must renegotiate his mortgage. If the current market rate for mortgages is 7 percent. What is Jimmie’s new monthly payment? (Round effective monthly rate to 6 decimal places,...

  • Five years ago you took out a​ 5/1 adjustable rate mortgage and the​ five-year fixed rate...

    Five years ago you took out a​ 5/1 adjustable rate mortgage and the​ five-year fixed rate period has just expired. The loan was originally for $ 310 comma 000 with 360 payments at 4.4 % ​APR, compounded monthly. a. Now that you have made 60 ​payments, what is the remaining balance on the​ loan? b. If the interest rate increases by 0.9 %​, to 5.3 % ​APR, compounded​ monthly, what will be your new​ payments? a. Now that you have...

  • For the first two years of her mortgage Theresa was making fixed monthly payments of $1,000...

    For the first two years of her mortgage Theresa was making fixed monthly payments of $1,000 per month. Her two year fixed-rate period has just ended, and now she must pay an interest rate of 6%. The amount outstanding on the mortgage is $170,000, and the mortgage will last for 28 years more. Calculate the increase in monthly repayments that she must now pay. Calculate your answer to the nearest dollar.

  • Five years ago you took out a 5/1 adjustable rate mortgage and the five-year fixed rate...

    Five years ago you took out a 5/1 adjustable rate mortgage and the five-year fixed rate period has just expired. The loan was originally for $302,000 with 360 payments at 4.3% APR, compounded monthly a. Now that you have made 60 payments, what is the remaining balance on the loan? b. If the interest rate increases by 1.1%, to 5.4% APR, compounded monthly, what will be your new payments? a. Now that you have made 60 payments, what is the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT