Question: Adjustable Rate Mortgage with Caps Calculation Complete the chart below using the loan assumptions below. Loan Assumptions Loan Amount: $350,000 Term: 30 years (360 months)
Adjustable Rate Mortgage with Caps Calculation
Complete the chart below using the loan assumptions below.
Loan Assumptions
Loan Amount: $350,000
Term: 30 years (360 months)
Margin: 2.75%
Periodic Cap: 1.00%
Life-of-Loan Cap: 5.00%
Life-of-Loan Max. Interest Rate: 8.50%
Rate changes once a year at the beginning of the year.
|
| Year 1 | Year 2 | Year 3 |
| Index WSJ Prime Rate | 3.25% | 3.75% | 4.5% |
| Teaser Rate | 3.5% | n/a | n/a |
| Annual Interest Rate |
|
|
|
| Beginning Mortgage Balance | 350,000 |
|
|
| Remaining Term (at beginning of year) | 360 months |
|
|
| Monthly Payment |
|
|
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