You bought a house with price of $250,000. Your LTV (loan-to-value ratio) is 80%. You choose the
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Question:
You bought a house with price of $250,000. Your LTV (loan-to-value ratio) is 80%. You choose the 30-year mortgage with interest rate 6%. Assuming the total transaction cost is $10,000.
Questions (5 points for each question)
- What is your loan amount? What is your monthly payment? What will be the loan balance at the end of nine years?
- What is the effective borrowing cost if the loan will be prepaid at the end of nine years?
- In the monthly payment, how much you pay for the principle and how much you pay for the interest in the 1st and the 2nd month?
- What will be your interest payments for the first 5 years (year 1 to year 5) and the last 5 years (year 26 to year 30)?
- What is your annual percentage rate (APR)?
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