Homework Answers
Answer : False
Explanation
Prepayment penalty will be assessed if if borrower pay off the mortgage before term and it is based on percentage of the remaining mortgage balance or certain number of month's worth of interest.
Prepayment penalties serve as protection for lenders against losing interest income.in other words prepayment penalties are written into mortgage contracts by lenders to compensate for prepayment risk.
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QUESTION 5 A prepayment penalty requires the borrower to pay the total amount of interest that...
I just need question 14 13. John wants to buy a property for $105,000 and wants...
I
just need question 14
13. John wants to buy a property for $105,000 and wants an 80 percent loan for $84,000. A lender indicates that a fully amortizing! loan can be obtained for 30 years (360 months) at 8 percent interest; however, a loan fee of $3,500 will also be necessary for John to obtain the loan. a. How much will the lender actually disburse? b. What is the APR for the borrower, assuming that the mortgage is paid...
One way banks may try to reduce prepayment associated with mortgage loans is to charge a...
One way banks may try to reduce prepayment associated with mortgage loans is to charge a “prepayment penalty” if you pay off the loan during a penalty period - some charge the fee only for a refinance, others for any reason say during the first 5 years of the loan. The bank may offer lower origination fees in exchange for the penalty. Assume the initial loan of $250,000 is for a 30 year FRM at 4%. Let’s assume the penalty...
The FHA requires that a self-employed borrower must have been self-employed for at least two years....
The FHA requires that a self-employed borrower must have been self-employed for at least two years. Question 16 options: 1) True 2) False Question 17 (2 points) An individual other than the borrower that assures the payment of a note is a: Question 17 options: 1) dispensator 2) executor 3) vindicator 4) guarantor Question 18 (2 points) Under the current rules, the FHA annual insurance premium must be paid for the entire life of the loan regardless of the down...
May I please have help with these? also how would I put this in the calculator?...
May I please have help with these? also how would I
put this in the calculator?
For 26-30) A borrower is faced with choosing between two mortgages: Loan B 80,000 25 yr 10.5% 2 pt 496 Loan A Loan amount Term Interest rate Discount points Prepayment penalty 80,000 25 yr 10% 5 pt 0% Assuming monthly payments, if the loans are a. Loan A b. Loan B c. Both loan are same d. Can not determined with the info given...
Please answer all parts A, B, and C. Please show all work! If you use Excel...
Please answer all parts A, B, and C. Please show all
work! If you use Excel to solve this problem please make clear the
calculations you made.
a. Calculate the monthly interest and principal cash flow for a fixed rate self amortizing mortgage with an initial balance of $350,000, a contract rate of 3.75%, and a maturity of two years. b. If the borrower decides to pay the loan back in full after the sixteenth month and the lender charges...
A borrower had a loan of $30,000.00 at 5% compounded annually, with 7 annual payments. Suppose...
A borrower had a loan of $30,000.00 at 5% compounded annually, with 7 annual payments. Suppose the borrower paid off the loan after 4 years. Calculate the amount needed to pay off the loan. The amount needed to pay off this loan after 4 years is $ (Round to the nearest cent as needed.)
A. What would be your monthly mortgage payment if you pay for a $250,000
4. A. What would be your monthly mortgage payment if you pay for a $250,000 home by making a 20% down payment and then take out a 3.74% thirty year fixed rate mortgage loan where interest is compounded monthly to cover the remaining balance. All work must be shown justifying the following answers. Mortgage payment = B. How much total interest would you have to pay over the entire life of the loan. Total interest paid = C. Suppose you inherit some money and...
What is the advantage of a variable-interest loan? 1. Protects the borrower from rising interest rates...
What is the advantage of a variable-interest loan? 1. Protects the borrower from rising interest rates 2 .Reduces the total interest payments 3. Protects the borrower from falling interest rates 4. Makes it easier for the borrower to plan for future payments. -------------------------------------------------------------------------- What does underwriting include in the general lending process? 1.Creating documentation for the borrower to sign 2.Assessing the borrower’s eligibility for the loan 3.Discussing loan amount and interest rate with the borrower 4. Monitoring loan account --------------------------------------------------------------------------...
RM60,000 is borrowed for 12 years at 5% compounded annually. The borrower does not pay interest c...
RM60,000 is borrowed for 12 years at 5% compounded annually. The borrower does not pay interest currently and will pay all accrued interest at the end of 12 years together with the principal. (a) Find the amount annual sinking fund deposit necessary to liquidate the loan at the end of 12 years if the sinking fund earns 3% yearly compounding and the borrower make first payment immediately. (b) Prepared a sinking fund schedule. Ans: (a) RM 7,371.25 (PLS DUN ANSWER...
Pleaae solve all 14. (I) A discount bond requires the borrower to repay the principal at...
Pleaae solve all
14. (I) A discount bond requires the borrower to repay the principal at the maturity date plus an interest payment. (II) A coupon bond pays the lender a fixed interest payment every year until the maturity date, when a specified final amount (face or par value) is repaid. A) (D) is true, (II) false. C) Both are true. B) (1) is false, (II) true. D) Both are false. 15. With an interest rate of 10 percent, the...
I
just need question 14
13. John wants to buy a property for $105,000 and wants an 80 percent loan for $84,000. A lender indicates that a fully amortizing! loan can be obtained for 30 years (360 months) at 8 percent interest; however, a loan fee of $3,500 will also be necessary for John to obtain the loan. a. How much will the lender actually disburse? b. What is the APR for the borrower, assuming that the mortgage is paid...
May I please have help with these? also how would I
put this in the calculator?
For 26-30) A borrower is faced with choosing between two mortgages: Loan B 80,000 25 yr 10.5% 2 pt 496 Loan A Loan amount Term Interest rate Discount points Prepayment penalty 80,000 25 yr 10% 5 pt 0% Assuming monthly payments, if the loans are a. Loan A b. Loan B c. Both loan are same d. Can not determined with the info given...
Please answer all parts A, B, and C. Please show all
work! If you use Excel to solve this problem please make clear the
calculations you made.
a. Calculate the monthly interest and principal cash flow for a fixed rate self amortizing mortgage with an initial balance of $350,000, a contract rate of 3.75%, and a maturity of two years. b. If the borrower decides to pay the loan back in full after the sixteenth month and the lender charges...
A borrower had a loan of $30,000.00 at 5% compounded annually, with 7 annual payments. Suppose the borrower paid off the loan after 4 years. Calculate the amount needed to pay off the loan. The amount needed to pay off this loan after 4 years is $ (Round to the nearest cent as needed.)
Pleaae solve all
14. (I) A discount bond requires the borrower to repay the principal at the maturity date plus an interest payment. (II) A coupon bond pays the lender a fixed interest payment every year until the maturity date, when a specified final amount (face or par value) is repaid. A) (D) is true, (II) false. C) Both are true. B) (1) is false, (II) true. D) Both are false. 15. With an interest rate of 10 percent, the...
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