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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This note was uploaded on 02/23/2010 for the course FIN 81824 taught by Professor Mcgrath during the Winter '09 term at CSU San Bernardino.

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

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