The amount of principal paid in the early stages of a mortgage is relatively modest. On...
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The amount of principal paid in the early stages of a mortgage is relatively modest. On a $100,000 loan, at 6 percent for 360 months, the first payment is almost exactly $600 with $500 going for interest and $100 going toward principal. Before 2008's financial meltdown, many new homebuyers were getting "interest-only" mortgages. (They paid $500 per month for the first five years and then $644 per month thereafter.) Do you think this was a good idea? [10 marks] The amount of principal paid in the early stages of a mortgage is relatively modest. On a $100,000 loan, at 6 percent for 360 months, the first payment is almost exactly $600 with $500 going for interest and $100 going toward principal. Before 2008's financial meltdown, many new homebuyers were getting "interest-only" mortgages. (They paid $500 per month for the first five years and then $644 per month thereafter.) Do you think this was a good idea? [10 marks]
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Evaluating whether interestonly mortgages were a good idea involves considering several factors Here are some key points to consider in assessing the pros and cons 1 Lower Initial Payments One advanta... View the full answer
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0134141084
11th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
Posted Date:
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