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AQR Unit 1
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Terms in this set (63)
$266,575
Brandon has a 15 year fixed rate mortgage for $175,500 with monthly payments of $1,480.97.
The annual interest rate is 6%. What is the total cost of the principal and interest for this loan
rounded to the nearest dollar?
$1,922
Sofia has a 5.2% fixed rate 30 year mortgage in the amount of $350,000. The total cost of
principal and interest is about $691,880. Which of the following is closest to Sofia's monthly
payment?
$707,340
Ricardo obtains a 30 year 8.1% fixed rate mortgage for $424,500. The monthly payments are
about $3,144. What is the total amount of interest for Ricardo's mortgage?
$2,228.64
Barney has a 15 year adjustable rate mortgage that has a rate of 2.3% for the first 5 years. The
amount of the mortgage is $339,000. What is the monthly payment during this initial period?
6th year: 6%; Lifetime: 11%
A bank advertises an adjustable rate mortgage with the following terms:
25 year 5/1 ARM at 4% with a 2/7 cap structure
What are the maximum interest rates for the 6th year and for the life of the mortgage?
$150,143
Mandy has a 30 year adjustable rate mortgage with a rate of 4.8% for the first 2 years. The
monthly payment is $813.23. The amount of the mortgage is $155,000. What is the remaining
balance after 2 years rounded to the nearest dollar?
$4,295
An $800,000 balloon mortgage has terms of 30/5 with a 5% interest rate. What is the monthly payment rounded to the nearest dollar?
$1,121,213
Emily obtains a $1,250,000 balloon mortgage for an investment property. The mortgage has
terms of 30/5 at an interest rate of 3.5%. The monthly payment is $5,613.06. How much is the
remaining balance after 5 years rounded to the nearest dollar?
$771,216
A store owner used a balloon mortgage to purchase an investment property. The terms are
shown: (Picture is in the AQR file, labeled Chart1)
What is the total cost of this balloon mortgage rounded to the nearest dollar?
Fixed rate and adjustable rate only
A bank offers three mortgages shown. Which mortgage(s) will have fixed payments for at least
the first 6 years?
Fixed rate mortgage at 5% for 15 years
Adjustable rate mortgage at 3% for 15 years with terms 6/2 and a cap of 2/4
Balloon mortgage at 4% with terms 15/4
$493,343
A $225,000 adjustable rate mortgage is expected to have the following payments: (Picture is in the AQR file, labeled Chart2)
What is the total cost of the mortgage rounded to the nearest dollar?
$12,951.80
A bank charges 3.1 discount points on a loan of $417,800. What is the cost of the points?
$14,945.00
Josephine has purchased her first home. Her choice of loans is shown.
Loan A
$200,000
25 year-fixed
2 discount point
M = $1,350.41
Loan B
$200,000
25 year-fixed
0 discount point
M = $1,413.56
What is the difference between the total cost of principal, interest, and points for each loan?
63 months
The bank offers Mark a fixed rate loan with no points and a fixed rate loan with points. The
difference in monthly payments between the loan with points and the loan without points is
$19.18. The cost of the points is $1,200. What number is closest to the break-even point
rounded to the nearest month?
$51.78
The seller of a property has paid $2,700 in property taxes for the year in advance. The closing
date of the sale is December 24 and the buyer owns the home on the closing day. How much
does the buyer owe the seller in prorated property taxes? Assume the year has 365 days.
$1,200
A house sold for $200,000. The mortgage on the house is $150,000. The documentary stamp
tax on the deed is $0.60 per $100 or portion thereof. How much is the documentary stamp tax
on the deed?
$6,750
A bank charges 2.25 of a point for the origination fee on a mortgage of $300,000. What is the
origination fee?
$469.80
Baldwin has purchased a home for $174,000. He made a 10% down payment and financed the
remaining amount. The intangible tax is 0.3%. Which of the following is the total amount of
the intangible tax?
$25,600
A mortgage is in the amount of $800,000. The origination fee is 0.9%, the intangible tax is
0.1%, and there are 2.2 discount points. Which of the following is the total cost of the
origination fee, intangible tax, and discount points?
$955,546.30
David is purchasing a home for $613,000. He makes a 10% down payment and obtains a 15-year fixed rate mortgage loan at 7% annual interest. His monthly payments are $4,958.84. He
pays an intangible tax of 0.3%. Which of the following is the total cost of principal, interest,
down payment, and intangible tax?
$1,248.61
Walker is buying a house for $225,000. He is financing $195,000 and obtained a 30 year, fixed rate mortgage with a 6.625% interest rate. How much are his monthly payments?
$897,976.80
Ken is financing a $355,000 mortgage for 30 years at a fixed rate of 7.55%. What is the total
cost of the principal and interest after 30 years?
$310,969
Artie is financing a condominium for $313,000. He gets a 30 year, fixed rate mortgage with a
rate of 5.275%. How much interest will he pay over the life of his loan? Round to the nearest
dollar.
$45,081.00
Michelle is debating between two different mortgages for $184,000. She found a 20 year fixed
rate loan at 7.05% and 15 year fixed rate loan at the same rate. How much more interest will
she pay for the 20 year loan versus the 15 year loan?
13.85%
A bank advertises a 3/1 ARM at 7.85% with a 3/9 cap.
What is the maximum interest rate that can be charged during the fifth year?
$2,252.70
Aimee and Ben are purchasing a condominium and are financing $415,500. The mortgage is a
20 year 3/1 ARM at 2.75% with a cap structure of 1.5/8. What will their payments be for the
first 3 years?
$456,659.67
Karla and Juan are purchasing a house and are financing $590,000. The mortgage is a 20 year
6/1 ARM at 3.75% with a 3/8 cap structure. What will the remaining balance be after the first
6 years?
$4400.65
Wendy is purchasing a condominium and is financing $595,000 with a 20 year 6/1 ARM at
5.65% with a 1/8 cap structure. What will her payments be at the beginning of year 7?
$309.69
Bart and April are purchasing a house with a 15 year, 2/1 ARM for $315,000 at 5.85% with a
2/8 cap structure. What will the difference in payments be from year 2 to year 3?
$1836.87
Answer the question below using the following amortization table.
(Saved as Graph 1 under AQR folder)
What is the regular monthly payment?
$1305.32
Morgandee obtains a $212,000 30/7 balloon mortgage with a rate of 6.25%. What will her
monthly payments be?
$154,430.64
Marlin obtains a 20/6 balloon mortgage to finance $305,500 at 5.75%. How much principal
and interest will he have already paid when his balloon payment is due?
$249,256.48
Joanne and Bill are financing $305,500 to purchase a house. They obtained a 20/6 balloon
mortgage at 5.75%. What will their balloon payment be?
$264,100.53
Shannon finances $189,000 with a 20/7 balloon mortgage at 6.25%. How much will she pay
for principal and interest over the life of the loan?
$96,656.46
Andrew and Aimee have a 20/6 balloon mortgage for $341,100 with a rate of 5.15%. How
much will they pay in interest over the life of the loan?
$5,440.00
Rae and Archie are financing $136,000 to purchase a condominium. They obtained a 15 year,
fixed rate loan with a rate of 5.25%. They have been given the option of purchasing up to four
points to lower their rate to 5.02%. How much will the four points cost them?
$21,548.40
Lucy is financing $370,000 to purchase a house. How much money will she save over the life
of a 30 year, fixed rate loan by buying 3 points with a rate of 6.175% instead of not buying points
with a rate of 6.55%?
13 years, 7 months
Ken and Kim have obtained a 30 year, fixed rate mortgage for $625,250 with a 7.05% interest
rate. They purchased 3 points and their rate is now 6.775%. Factoring in the cost of points,
when is the breakeven point on their mortgage?
Amy should not purchase the discount points because she does not have enough available cash.
Amy is deciding between two loans.
Loan A
$215,000
20 year fixed
7.95%
0 discount points
M=$1791.66
Loan B
$215,000
20 year fixed
7.75%
3 discount points
M=$1765.04
She has calculated all of the associated fees as well as any other expenses. She has $5,500
available to purchase the points, and plans to stay in the house for half the length of the loan.
Which statement represents the best financial decision?
$2,088.13
Jessica is financing a house for $128,750. She has to pay $350 plus 1.35% for a brokerage fee.
How much are the mortgage brokerage fees?
$626.50
Fabian is purchasing a home for $89,500 and is financing 75% of it. The documentary stamp
tax on the deed in his state is $0.70 per $100 or portion thereof. How much will he pay for the
documentary stamp tax?
$9,737.14
Lillia and Ryan have signed a contract to purchase a home. The closing date is May 27, and
the buyer owns the property on the day of closing. The selling price of the home is $872,500. Lillia and Ryan obtained a fixed rate mortgage from a bank for $695,000 at 7.25% interest.
The seller has already paid $15,078.15 in property taxes for the coming year. How much will Lillia and Ryan owe in prorated expenses?
$12,610.01
Jakob is purchasing a condominium for $347,500 and has financed 90% of it. He has purchased 2 discount points, has to pay a 1.75% origination fee and a brokerage fee of $100 plus 0.25% of the loan. What are his total fees that he must pay?
$266,575
Brandon has a 15-year fixed rate mortgage for $175,500 with monthly payments of $1,480.97. The
annual interest rate is 6%. What is the total cost of the principal and interest for this loan rounded to the
nearest dollar?
$2,458
Sonika has a 6.4% fixed rate 40-year mortgage in the amount of $425,000. The total cost of principal and
interest is about $1,179,830. Which of the following is closest to Sonika's monthly payment?
$707,340
Ricardo obtains a 30-year 8.1% fixed rate mortgage for $424,500. The monthly payments are about
$3,144. What is the total amount of interest for Ricardo's mortgage?
$447.87
Bob has a 30-year adjustable rate mortgage that has a rate of 2.8% for the first 3 years. The amount of
the mortgage is $109,000. What is the monthly payment during this initial period?
3rd year: 9%; Lifetime: 12%
A bank advertises an adjustable rate mortgage with the following terms:
30 year 2/1 ARM at 6% with a 3/6 cap structure
What are the maximum interest rates for the 3rd year and for the life of the mortgage?
$4,751
A $900,000 balloon mortgage has terms of 25/7 with a 4% interest rate. What is the monthly payment
rounded to the nearest dollar?
$310,761
Marcia has a 25-year adjustable rate mortgage with a rate of 4.2% for the first 3 years. The monthly
payment is $1,805.46. The amount of the mortgage is $335,000. What is the remaining balance after 3
years rounded to the nearest dollar?
$1,945,745
Edith obtains a $2,250,000 balloon mortgage for an investment property. The mortgage has terms of
20/4 at an interest rate of 4.5%. The monthly payment is $14,234.61. How much is the remaining balance
after 4 years rounded to the nearest dollar?
$753,415
A store owner used a balloon mortgage to purchase an investment property. The terms are shown:
$700,000
15/3 balloon
2.7% annual rate
Monthly Payment: $4,733.71
Balloon Payment: $583,001.28
What is the total cost of this balloon mortgage rounded to the nearest dollar?
Fixed rate, adjustable rate, and balloon
A bank offers three mortgages shown. Which mortgage(s) will have fixed payments for at least the first 3
years?
Fixed rate mortgage at 5% for 30 years
Adjustable rate mortgage at 3% for 30 years with terms 3/1 and a cap of 2/5
Balloon mortgage at 4% with terms 30/5
$1,151,134
A $525,000 adjustable rate mortgage is expected to have the following payments:
Year Interest Rate Monthly Payment
1-5 4% $2,506.43
6-15 6% $3,059.46
16-25 8% $3,464.78
26-30 10% $3,630.65
What is the total cost of the mortgage rounded to the nearest dollar?
$3,394.80
A bank charges 0.9 discount points on a loan of $377,200. What is the cost of the points?
$10,831.20
Josephine has purchased her first home. Her choice of loans is shown.
Loan A
$150,000
20 year-fixed
3 discount point
M = $1,010.77
Loan B
$150,000
20 year-fixed
0 discount point
M = $1,074.65
What is the difference between the total cost of principal, interest, and points for each loan?
60 months
The bank offers Manfred a fixed rate loan with no points and a fixed rate loan with points. The difference
in monthly payments between the loan with points and the loan without points is $38.42. The cost of the
points is $2,300. What number is closest to the break-even point rounded to the nearest month?
$51.78
The seller of a property has paid $2,700 in property taxes for the year in advance. The closing date of the
sale is December 24 and the buyer owns the home on the closing day. How much does the buyer owe the
seller in prorated property taxes? Assume the year has 365 days.
$4,000
A house sold for $500,000. The mortgage on the house is $350,000. The documentary stamp tax on the
deed is $0.80 per $100 or portion thereof. How much is the documentary stamp tax on the deed?
$2,500
A bank charges 1.25 of a point for the origination fee on a mortgage of $200,000. What is the origination
fee?
$1,196.80
Brandon has purchased a home for $352,000. He made a 15% down payment and financed the
remaining amount. The intangible tax is 0.4%. Which of the following is the total amount of the
intangible tax?
$25,600
A mortgage is in the amount of $800,000. The origination fee is 0.9%, the intangible tax is 0.1%, and
there are 2.2 discount points. Which of the following is the total cost of the origination fee, intangible
tax, and discount points?
$1,713,299.05
Darren is purchasing a home for $973,000. He makes a 25% down payment and obtains a 20-year fixed
rate mortgage loan at 8% annual interest. His monthly payments are $6,103.92. He pays an intangible
tax of 0.7%. Which of the following is the total cost of principal, interest, down payment, and intangible
tax?
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