Problem 5 You have the following two mortgage choices: Fixed-rate Mortgage $100,000 Mortgage Amount Term The...
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Problem 5 You have the following two mortgage choices: Fixed-rate Mortgage $100,000 Mortgage Amount Term The payment rises each year Discounts Points Costs with Loan Orignation Initial Contract Interest Rate 3 years with annual PMT 0 $1,000 11.00% Margin Caps Market Index Calculate APR for each mortgage choice? 2/1 Interest-only ARM $100,000 3 years with annual PMT 0 $1,000 10.00% 2.00% no annual cap; 3% lifetime cap End of Year (EOY) 1: 7.0%; EOY 2: 4.5% Problem 5 You have the following two mortgage choices: Fixed-rate Mortgage $100,000 Mortgage Amount Term The payment rises each year Discounts Points Costs with Loan Orignation Initial Contract Interest Rate 3 years with annual PMT 0 $1,000 11.00% Margin Caps Market Index Calculate APR for each mortgage choice? 2/1 Interest-only ARM $100,000 3 years with annual PMT 0 $1,000 10.00% 2.00% no annual cap; 3% lifetime cap End of Year (EOY) 1: 7.0%; EOY 2: 4.5%
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