The Ruffins are negotiating with two banks for a mortgage to buy a house selling for $185,000. The terms at bank A are a 15% down payment, an interest rate of 10%, a 30-year conventional mortgage, and 3 points to be paid at the time of closing. The terms at bank B are a 20% down payment, an interest rate of 10.5%, a 25-year conventional mortgage, and no points. Which loan should the Ruffins select in order for the total cost of the house to be less? Click here for table of Monthly Payments From which bank should the Ruffins take the loan? O Bank A O Bank B
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- The Ruffins are negotiating with two banks for a mortgage to buy a house selling for $115,000. The terms at bank A are a 20% down payment, an interest rate of 10.5%, a 30-year conventional mortgage, and 3 points to be paid at the time of closing. The terms at bank B are a 15% down payment, an interest rate of 10.0%, a 25-year conventional mortgage, and no points. Which loan should the Ruffins select in order for the total cost of the house to be less?The Fritzes are buying a house that sells for $173,000. The bank is requiring a minimum down payment of 10%. To obtain a 30-year mortgage at 11.5% interest, they must pay 2 points at the time of closing a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 10% down payment. c) Find the cost of 2 points on the mortgage. a) The required down payment is $ b) The mortgage on the property is S c) The cost of the 2 points on the mortgage is $ (Round to the nearest dollar as needed.)The Fritzes are buying a house that sells for $100,000. The bank is requiring a minimum down payment of 15%. To obtain a 30-year mortgage at 12.5% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 15% down payment. c) Find the cost of 4 points on the mortgage. a) The required down payment is $
- The Fritzes are buying a house that sells for $196,000. The bank is requiring a minimum down payment of 20%. To obtain a 30-year mortgage at 12.0% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 20% down payment. c) Find the cost of 4 points on the mortgage.The Fritzes are buying a house that sells for $158,000. The bank is requiring a minimum down payment of 15%. To obtain a 20-year mortgage at 13.0% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 15% down payment. c) Find the cost of 4 points on the mortgageThe Fritzes are buying a house that sells for $107,000.The bank is requiring a minimum down payment of 20%.To obtain a 40-year mortgage at 9.5% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 20% down payment. c) Find the cost of 4 points on the mortgage. a) The required down payment is $ enter your response here.
- 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 Indifferent between the two optionsAfter a conversation with your banker, you’ve agreed to a 20% down payment on your $182,188 home. To keep this problem and your calculations relatively brief, assume that the bank has offered you a mortgage loan for $145,750 that carries a 6% interest rate, semiannual payments of $26,905, and a 3-year term. Remember, the process is the same when you are preparing for either 6 semiannual payments of nearly $27,000 or 360 monthly payments of $873.85 for a 30-year conventional mortgage.Complete the following loan amortization table by entering the correct answers. Notes: 1. As all values are denominated in U.S. dollars, you do not have to enter any dollar signs. 2. Round all interest payments down to the nearest whole dollar. 3. Rounding creates a situation in which the numbers in the loan’s final payment are often unequal. Notice in this problem, the ending balance for payment 6 is –$2. Therefore, your final payment would actually be reduced by $2 to $26,903. In the real world,…John wants to buy a property for $121,250 and wants an 80 percent loan for $97,000. A lender indicates that a fully amortizing loan can be obtained for 30 years (360 months) at 9 percent interest; however, a loan fee of $4,800 will also be necessary for John to obtain the loan. Required: a. How much will the lender actually disburse? b. What is the APR for the borrower, assuming that the mortgage is paid off after 30 years (full term)? c. If John pays off the loan after five years, what is the effective interest rate? d. Assume the lender also imposes a prepayment penalty of 2 percent of the outstanding loan balance if the loan is repaid within eight years of closing. If John repays the loan after five years with the prepayment penalty, what is the effective interest rate
- You want to buy a house thatcosts $140,000. You have $14,000 for a down payment, but your credit is such that mortgagecompanies will not lend you the required $126,000. However, the realtor persuadesthe seller to take a $126,000 mortgage (called a seller take-back mortgage) at a rate of 5%,provided the loan is paid off in full in 3 years. You expect to inherit $140,000 in 3 years, butright now all you have is $14,000, and you can afford to make payments of no more than$22,000 per year given your salary. (The loan would call for monthly payments, but assumeend-of-year annual payments to simplify things.)a. If the loan was amortized over 3 years, how large would each annual payment be?Could you afford those payments?b. If the loan was amortized over 30 years, what would each payment be? Could youafford those payments?c. To satisfy the seller, the 30-year mortgage loan would be written as a balloon note,which means that at the end of the third year, you would have to make the…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?A house is selling for $150,000. A deposit of $20,000 was made when the sales contract was signed. The down payment is 30% and the balance will be financed with a 25 year mortgage at 4.25% and 4 discount points. If the sellers are responsible for the broker’s commission (6% of the purchase price); $1700 in other closing costs; and the existing mortgage with a balance of $30,000; what proceeds will they receive on the sale of the property?