Question: An Investor is purchasing a fixer upper multifamily for $1,000,000. She wants a mortgage loan for $800,000 or 80% loan to cost. She went to

An Investor is purchasing a fixer upper multifamily for $1,000,000. She wants a mortgage loan for $800,000 or 80% loan to cost. She went to a local bank, which offered her a Adjustable Rate Mortgage starting at 4% for the first year, the rate can adjust every year depending on the bank prime rate. The loan amortizes using a 25 year schedule.

What is the monthly mortgage payments for the first year?

The interest rate adjusts the second year to 5%. What is the new mortgage payment the second year?

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