ARE144_chap_06_bf13ed_v2

ARE144_chap_06_bf13ed_v2 - 1 Managerial Economics (ARE) 144...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Managerial Economics (ARE) 144 University of California, Davis Instructor: John H. Constantine Handout: Chapter 6, Chapter 6, Mortgages: Additional Concepts, Analysis, and Applications (1) Why do points increase the effective interest rate for a mortgage loan more if the loan is held for a shorter time period than a longer time period? (2) What factors must be considered when deciding whether to refinance a loan after interest rates have declined? (3) Why might the market value of a loan differ from its outstanding balance? (4) Why might a borrower be willing to pay a higher price for a home with an assumable loan? (5) Assuming the borrower is in no danger of default, under what conditions might a lender be willing to accept a lesser amount from a borrower than the outstanding balance of a loan and still consider the loan paid in full? (6) Assuming the borrower is in no danger of default, under what conditions might a lender be willing to accept a lesser amount from a borrower than the outstanding balance of a loan and still consider the loan paid in full? (7) Under what conditions might a home with an assumable loan sell for more than comparable homes with no assumable loans available? (8) What is meant by the incremental cost of borrowing additional funds? (9) Is the incremental cost of borrowing additional funds affected significantly by early repayment of the loan? (10)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

ARE144_chap_06_bf13ed_v2 - 1 Managerial Economics (ARE) 144...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online