Greed bank ltd persuades Alex to avail an interest only ARM with the following terms: Amount of
Fantastic news! We've Found the answer you've been seeking!
Question:
Amount of loan : Rs 20lakhs, interest rate of 9% p.a which may be assumed to be fixed during the entire tenure of the loan . Interestonly period of 10years , followed by 10 more years for payment of both interest and principal. The loan will be secured by way of a mortgage of Alex's house .
Questions :
A: what payment of interest and/or principal does Alex need to pay in first 10 interest only years ?
B : what EMIs will be attracted and for how many years , after the interest only period ends?
C: what difficulties could alex be facing in such a loan ?
D: what is the biggest risk for the lender is such a loan ??
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
Posted Date: