In a mortgage loan, the borrower always creates two documents: a note and a mortgage. Describe...
In a mortgage loan, the borrower always creates two documents: a note and a mortgage. Describe the purpose for each document and what the differences are.
Homework Answers
A note that the borrower always create shows a legal contract between a borrower and the lender that requires you to pay off. In the bill it is also mentioned what will happen if they fail for the payment of the loan.
Mortgage means a debt instrument which is secured by a collateral property on which the borrower is obliged to pay back with a determined and agreed set of payments. Purpose of the mortgage is to ensure their money against collateral.
Difference between a note and a mortgage is that the bill contains the promise to repay the amount borrowed. But a mortgage is to provide security for the loan which is evidenced by the record.
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In a mortgage loan, the borrower always creates two documents: a
note and a mortgage. Describe...
A B C A borrower takes out a 29-year mortgage loan for $286,819 with an interest...
A
B
C
A borrower takes out a 29-year mortgage loan for $286,819 with an interest rate of 9%. What would the monthly payment be? A borrower takes out a 30-year mortgage loan for $190,372 with an interest rate of 8% and monthly payments. What portion of the first month's payment would be applied to interest? A borrower has a 25-year mortgage loan for $495,186 with an interest rate of 9% and monthly payments. If she wants to pay off...
5. Probability relationships Aa Aa A mortgage is a loan that the borrower uses to finance...
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Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $360,000, 90-day,...
Evaluating Alternative Notes
A borrower has two alternatives for a loan: (1) issue a
$360,000, 90-day, 7% note or (2) issue a $360,000, 90-day note that
the creditor discounts at 7%. Assume a 360-day year.
Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $360,000, 90-day, 7% note or 2) issue a $360,000, 90-day note that the creditor discounts at 7%. Assume a 360-day year. a. Calculate the amount of the interest expense for each...
A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. The...
A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. The first two years of the loan have a “teaser” rate of 4%, after that, the rate can reset with a 2% annual rate cap. On the reset date, the composite rate is 5%. What would the Year 3 monthly payment be? a. $955 b. $1,071 c. $1,067 d. $1,186 e. Because of the rate cap, the payment would not change.
2. (25 Points) Suppose a borrower takes out a 30-year adjustable rate mortgage loan for $200,000...
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. Suppose a borrower has paid down their mortgage from $300,000 to $280,000 when they default. The home is sold at foreclosure for $200,000. If the borrower has PMI, insuring the top 30% of the loan, the lender's loss will be __________. If the borrower had an FHA loan, the lender's loss will be _____________. A $0; $0 B $10,000, $0 C $16,000; $0 D $10,000; $80,000
You are a new loan officer with Alpha Mortgage, and the manager of the loan department...
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A borrower takes out a 15-year mortgage loan for $250.000 with an interest rate of 6%....
A borrower takes out a 15-year mortgage loan for $250.000 with an interest rate of 6%. What would the monthly payment be? (A) $694 (B) $1,042 (C) $1,342 (D) $1,355 (E) $2,110 Regarding the above question, what portion of the first month's payment would be applied to interest? (A) $694 (B) $1,042 (C) $1,250
Which ONE of the following is NOT a common characteristic of a Mortgage Note Payable? The...
Which ONE of the following is NOT a common characteristic of a Mortgage Note Payable? The amount borrowed under a mortgage loan is related to the purchase of a specific asset. O Monthly payments typically include monthly interest and some portion for the principal on the mortgage note payable. The interest rate includes a 1.45% annual government charge which is paid by both the borrower and the mortgage lender. Assets purchased with a mortgage are usually pledged as security or...
Mortgage loan commercials and bank banners can be a little confusing due to the fact they...
Mortgage loan commercials and bank banners can be a little confusing due to the fact they report two rates: 1) the stated nominal annual rate that we usually think of as APR which is compounded monthly and is the rate that is used on the actual loan amount to determine the monthly payment, and 2) the “APR” which is somewhat higher and in some ads significantly higher than the first rate. This second “APR” is a stated nominal annual rate...
A
B
C
A borrower takes out a 29-year mortgage loan for $286,819 with an interest rate of 9%. What would the monthly payment be? A borrower takes out a 30-year mortgage loan for $190,372 with an interest rate of 8% and monthly payments. What portion of the first month's payment would be applied to interest? A borrower has a 25-year mortgage loan for $495,186 with an interest rate of 9% and monthly payments. If she wants to pay off...
5. Probability relationships Aa Aa A mortgage is a loan that the borrower uses to finance the purchase of a home. There are two basic types of mortgage loans: the fixed-rate mortgage and the adjustable-rate mortgage (ARM). For the purposes of this problem, assume that all mortgages are either fixed-rate or adjustable-rate Apart from the classification of a mortgage as fixed-rate or adjustable-rate, conventional mortgage loans (loans that are not government-insured) are categorized as prime or subprime. A subprime mortgage...
Evaluating Alternative Notes
A borrower has two alternatives for a loan: (1) issue a
$360,000, 90-day, 7% note or (2) issue a $360,000, 90-day note that
the creditor discounts at 7%. Assume a 360-day year.
Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $360,000, 90-day, 7% note or 2) issue a $360,000, 90-day note that the creditor discounts at 7%. Assume a 360-day year. a. Calculate the amount of the interest expense for each...
2. (25 Points) Suppose a borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. The first two years of the loan have a "teaser" rate of 4%, after that, the rate can reset with a 2% annual rate cap. On the reset date, the composite rate is 7%. What would the Year 3 monthly payment be? (15 points) Step I Step2 PV= -179084.11 PV = -200 000 I= 7412=10.58) I=47212= 10.33) N= 336 N=360 130x2)...
A borrower takes out a 15-year mortgage loan for $250.000 with an interest rate of 6%. What would the monthly payment be? (A) $694 (B) $1,042 (C) $1,342 (D) $1,355 (E) $2,110 Regarding the above question, what portion of the first month's payment would be applied to interest? (A) $694 (B) $1,042 (C) $1,250
Which ONE of the following is NOT a common characteristic of a Mortgage Note Payable? The amount borrowed under a mortgage loan is related to the purchase of a specific asset. O Monthly payments typically include monthly interest and some portion for the principal on the mortgage note payable. The interest rate includes a 1.45% annual government charge which is paid by both the borrower and the mortgage lender. Assets purchased with a mortgage are usually pledged as security or...
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