Q8. A 30-year FRM loan of $100,000 is issued at an annual interest rate of 6% with monthly amortization. There are no discount points or underwriting fees charged on this loan. What is the expected yield on this loan at years 1, 5, 10, and 30? What is the APR?

Q9. A 30-year FRM loan of $100,000 is issued at an annual interest rate of 5.50% with monthly amortization. However, the borrower is required to pay 2 discount points. What is the expected yield on this loan at years 1, 5, 10, and 30? What is the APR?

Q10. How do you compare the mortgages characterized in Q8 and Q9?

Answer rating: 100% (QA)

In both scenarios we are dealing with a 30year FRM loan of 100000 with monthly amortization However ... View the full answer