A mortgage company offers borrowers a 3% annual interest rate on the one-year ARM that is amortized
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A mortgage company offers borrowers a 3% annual interest rate on the one-year ARM that is amortized for 30 years. The index rate is forecast to be 4.5% for next year and the margin on this loan is 2%. The annual interest rate adjustment cap is 2%. What is the adjusted interest rate for the second year? What are the monthly payments for year 1 and 2 if $213,000 is borrowed? (Remember to use the balance as the new PV for 2nd year.)
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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