You have decided to buy a 3,250 square-feet house in Denton, close to a good public...

 

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You have decided to buy a 3,250 square-feet house in Denton, close to a good public school. The average price in the area is $190 per square feet. The bank will finance 90% of the house value, so you need savings for the 10% down payment. You sign a 20-year 3/1 adjustable rate mortgage (ARM), which carries a 3.2% fixed rate for the first 3 years, and then (after 3 years) is adjusted to the 1-year LIBOR +0.75 %. Compute your monthly payments in 3 years (month 61) if the LIBOR is 3% You have decided to buy a 3,250 square-feet house in Denton, close to a good public school. The average price in the area is $190 per square feet. The bank will finance 90% of the house value, so you need savings for the 10% down payment. You sign a 20-year 3/1 adjustable rate mortgage (ARM), which carries a 3.2% fixed rate for the first 3 years, and then (after 3 years) is adjusted to the 1-year LIBOR +0.75 %. Compute your monthly payments in 3 years (month 61) if the LIBOR is 3%

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To compute your monthly payments after 3 years month 61 when the LIBOR is 3 well need to break down ... View the full answer