Suppose you are considering buying a house with a market price of $225,000. You plan on making
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Question:
- Suppose you are considering buying a house with a market price of $225,000. You plan on making a down payment of 15% and financing the remainder using a 30 year mortgage with a fixed interest rate of 6.25%.
- What would the monthly payment be?
- Your friend suggests you might want to consider a 15 year loan. Assuming interest rates on 15 year loans are only 5.0 %, What would your monthly payment be if you chose the 15 year loan instead?
- After being in the house for four years, interest rates have dropped to 5% and you would like to refinance your loan for another 30 year term.
Balance after four years:
- What would be the new monthly payments after re-financing?
- Suppose you are wondering if you continued to make your monthly payments in the amount before re-financing. How long will it take to pay off the mortgage?
Related Book For
Money Banking and Financial Markets
ISBN: 978-0078021749
4th edition
Authors: Stephen Cecchetti, Kermit Schoenholtz
Posted Date: