Question1: Chapter 8 problem 2.(Assuming that the composite rate is 13% for all the years )

You are a new loan officer with Alpha Mortgage, and the manager of the loan department has just presented a problem to you. He is unable to complete the APR calculation on an adjustable rate mortgage that a borrower applied for yesterday. The loan features initial payments based on a 10 percent rate of interest, while the current composite rate on the loan is 13 percent. No discount points have been paid by any party to the transaction, and any difference between borrower payments and the interest payment required at the composite rate will be accrued in the mortgage balance in the form of negative amortization. The mortgage amount desired by the borrower is $65,000 for a 30-year term, but a one-time mortgage insurance premium of $2,400 is being funded as a part of the loan amount, making the total loan balance $67,400. The borrower is paying $1,600 in prepaid finance charges at closing.

Question 2: $200,000 house at 5.0% interest, 30 year loan, the LTV is 90%. Assume that the PMI has an upfront premium of 2% and an annual premium of 0.2%. How much is the upfront PMI payment and how much is the monthly PMI payment? How many months you have to pay PMI (when can you call your lender to request drop PMI payment)? How many months your lender have to drop your PMI payment?

Question 3: $350,000 house at 5.1% interest, 30 year loan, assume 2.00% property tax, average home insurance at $600 per year. Assume the LTV is 80%. You have $750 per month student loan, no other long term loan, your income is $70,000 per year. What is the frontend ratio? What is the back-end ratio? How much you can borrow (conventional loan, 28% front-end ratio)? Give your financial information, about how much house you can afford? Assume that you pay about $583 and $50 for property tax and insurance monthly.