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Final Exam_mock

# Final Exam_mock - 1 A homeowner has a \$200,000...

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with a current interest rate of 6% with a 2% margin over the LIBOR index, with a cap rate of 11% (cap rate means the maximum rate that can be charged to a borrower). What are the current monthly loan payments? With an annual maximum increase of 2% per year, under the worst case circumstances, what are the maximum monthly loan payments for the second, third and fourth year? \$200,000 interest-only loan x 6% =\$12,000 divided by 12 months = \$1,000 current monthly payment. Second year equals \$200,000 interest-only loan x 8% =\$16,000 divided by 12 months =\$1333,33 monthly payment. Similarly, third year is \$1666.67. Fourth year 11% cap rate is reached; therefore, \$200,000 interest-only loan x 11% =\$22,000 divided by 12 months =\$1833.33 monthly payment. 2. A buyer agrees to purchase an older studio condo using the FHA 203b program. The price and FHA-

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Final Exam_mock - 1 A homeowner has a \$200,000...

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