You are considering an ARM with the following characteristics: Mortgage amount = $ 4 8 0 ,
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Question:
You are considering an ARM with the following characteristics:
Mortgage amount $
Interest rate caps
Margin
Index year TB yield
Term years
Oneyear adjustable
Monthly Payments
Discount points
Initial Teaser Rate
Prepayment penalty for the first three years
All subsequent adjustments are made from the Teaser Rate
Suppose the TB yield at the outset of the loan, and the TB yield is at the end of year one. Suppose that, at the end of year two, the index is and stays constant for the remaining life of the loan.
If the loan is repaid at the end of year two, what is the effective cost?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: