Taylor took a $200,000 construction loan to build a new house. The house will be built...

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Taylor took a $200,000 construction loan to build a new house. The house will be built over a Ten-month period. During the construction period, the loan will attract only simple interest at the rate of ½ % per month. Taylor will not pay these monthly interests. They will rather be added to the loan amount each month. After construction, Taylor will convert the new loan balance into a 30-year mortgage. Since she has been saving for this house, she plans to put down 10% of the value of the house before signing the deal (assume the value of the house is the loan balance after construction). With an 805 Equifax credit score, she was able to get a fixed interest rate of 3% per year compounded monthly for 30 years. Draw Taylor's CFD from the time of the initial borrowing till the loan is paid off. i. ii. iii. How much will Taylor pay per month on the 30-year mortgage? At the end of the 30-year mortgage, what will be the total interest Taylor had paid to the bank? Taylor took a $200,000 construction loan to build a new house. The house will be built over a Ten-month period. During the construction period, the loan will attract only simple interest at the rate of ½ % per month. Taylor will not pay these monthly interests. They will rather be added to the loan amount each month. After construction, Taylor will convert the new loan balance into a 30-year mortgage. Since she has been saving for this house, she plans to put down 10% of the value of the house before signing the deal (assume the value of the house is the loan balance after construction). With an 805 Equifax credit score, she was able to get a fixed interest rate of 3% per year compounded monthly for 30 years. Draw Taylor's CFD from the time of the initial borrowing till the loan is paid off. i. ii. iii. How much will Taylor pay per month on the 30-year mortgage? At the end of the 30-year mortgage, what will be the total interest Taylor had paid to the bank?

Answer rating: 100% (QA)

i To draw Taylors Cash Flow Diagram CFD we need to take into account the following information The loan amount is 200000 The loan will attract simple ... View the full answer