{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

review'

# review' - A5 Mortgage Points Problem Points Table Provident...

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

A5 Mortgage Points Problem Points Table Provident Funding [per \$100,000 borrowed 10 year loan as of 9-7- 2010 Rate Pts/Credit % Pts/Credit \$ 3.250 % 2.625 % \$2,625.00 3.375 % 1.625 % \$1,625.00 3.500 % 0.625 % \$625.00 3.580 % 0.00 % \$0.00 3.625 % -0.375 % (\$375.00) 3.750 % -1.500 % (\$1,500.00) 3.875 % -2.125 % (\$2,125.00) 4.000 % -2.500 % (\$2,500.00) 4.125 % -2.625 % (\$2,625.00) Question: Your mortgage balance is currently \$117,000 with 10 years remaining on the original 30 year contract at 6.75%. a) Determine the original principal? \$207,130.14 First find PMT by looking at the 20 year mark going forward then use the PMT, I, and N=30 to find the PV You have decided to refinance because the current market mortgage rate is now __ 3.58 __%. As part of the refinance package, you are offered the option to "buy down" the market % mortgage rate by paying points. One point equals 1% of the principle—for each % drop in interest rates according to the above table. (b) Determine the new monthly payment associated with a refinance at the market rate and at the "buy down" of your rate to 3.375% Market rate: \$1,161.35, Buy-down rate: \$1,150.13 (c) Buying down has a cost. Determine that cost to buy down. Determine how many

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 3

review' - A5 Mortgage Points Problem Points Table Provident...

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

View Full Document
Ask a homework question - tutors are online