money answers

Friday, August 7, 2009

First Home Finance Question?

Problem 4: BUYING YOUR FIRST HOME

There is this 4 bedroom house you like, currently valued at $510,000. You and your spouse can make 20% down payment and amortize the remaining for the next 25 years. You can both make bi-weekly mortgage payments of $1,200 at the beginning of every two weeks. Your local bank has quoted you a mortgage rate of 6.1% APR with a 5-year term. You wish to select fixed interest rate plan for now.

a) Draw a detailed timeline and label all components.

b) Will you and your spouse be able to cover the mortgage with $1,200 bi-weekly payments? If not, what percentage or dollar amount of the current home value should you put in as your down payment to satisfy your mortgage payments?

c) If you wish to put in the 20% down payment, what should be the new bi-weekly mortgage payments you should pay at the beginning of every two weeks?

You and your spouse decided to purchase the house with a 20% down payment after all. Fifteen years later, you and your spouse realize that you want to accelerate this mortgage and finish paying the remaining principles within the next 5 years. You can do that by either 1 of the 2 methods. Your objective is to complete the mortgage payments within the next 5 years.

(A) 10% Annual Payments 鈥?Your bank will allow you to make a maximum of 10% of the full value (the amount before down payment) of the home each year. This can only be one lump sum payment within the year. For example, if your home value is $100,000 then you can only contribute a maximum payment of $10,000 (10% of $100,000) per year.

(B) Double-Up Payments 鈥?Your bank will allow you to schedule double-up mortgage payments. This means you can pre-authorize the bank to take extra payments up to the maximum amount of the bi-weekly payment. For example, if your bi-weekly payment is $1,000, you can instruct the bank to withdraw an additional $1,000 maximum for that payment and put a total of $2,000 as a payment.

d) Calculate the minimum annual amount required under method A to complete the mortgage within the next 5 years. You want to make these payments for the next 5 years and not make one large payment to cover the remaining balance. You will still make the regular weekly mortgage payments.

c) Calculate the total interest you are paying on this mortgage using the table.

e) Calculate the minimum double-up payments required in addition to the regular mortgage payments every two-week under method B to complete the mortgage within the next 5 years. Assume you have instructed the bank to double-up the payments until instructed otherwise. Remember, that each double-up payment cannot exceed the regular bi-weekly payments.

First Home Finance Question?fast loan

woah woah woah woah woah!!!!!!!!!

There is this 4 bedroom house you like, currently valued at $510,000. You and your spouse can make 20% down payment (OK GOOD HERE)!!!!! 510k souds pricey though

and amortize the remaining for the next 25 years NOT NO BUT HELL NO!!!!!!!

You can both make bi-weekly mortgage payments of $1,200 at the beginning of every two weeks. AGAIN WRONG MOVE. There is no need to make bi-weekly payments all of that extra money you are wasting it on your mortgage should be better used for savings/investments/emergencies.

Your local bank has quoted you a mortgage rate of 6.1% APR with a 5-year term. You wish to select fixed interest rate plan for now. This SCREAMS ARM!!!!!! 6.1% is a good rate BUT after that fifth year your interest rate JACKS UP AND YOU WILL PAY EXTRA CHARGES FOR THE REMANING BALANCE AND INTEREST.

Stay the hell away from this crap!!!! This is why there is a housing market/credit crunch going on right now. Sure five years looks good...THEN WHAT????? YOU GET SLAMMED THATS WHAT!!!!!

DEMAND 30 year fixed PERIOD!

Looking to find lowest refinance home mortgage rates?

I鈥檓 looking for a better home loan mortgage rate than I currently have with my bank. So I am seriously considering refinancing. Does anyone know where I can currently check for the lowest refinance home mortgage rates?

Looking to find lowest refinance home mortgage rates?va loan

You can actually get a better mortgage rate 鈥?without refinancing. There is a website which allows you to check for free if there is a better rate available with your current lender.

You can avoid the costs and all the paperwork and hassle associated with refinancing. Your bank won鈥檛 tell you that there is a better rate available with them, but there usually is.

Check for a lower rate here free:

http://www.checkmyrate.com.au

Looking to find lowest refinance home mortgage rates?

loan

The first thing I would do is get a copy of your credit report and score. Lending tree is a comparable rate lender that offers you several rates from competing banks, but you should know what your score is first! This is what the banks will be looking at!|||first get your credit score card -- next shop around just like you are buying a car!!!|||Hello,

My names are lisa cave i live in united state of america i work in an industried i have two kids and i am christan,the good news here is that i get my loan from Mr daniel walters i have been scamm before until i met mr daniel walters then my case was over.therefore, i advise every one to get there loan from mr daniel walters is a nice man.you can reach him at.Email: danielwalters_agency01@yahoo.com

He is a Private Loan Officer for the above named company and he can be of Help to you. He can help you get the loan you require. His Interest rate of 0.4% is fair enough.

Mr daniel walters

Tel;447045769629|||The only way for you to get the lowest rate possible is to shop around. There are several websites that get you multiple quotes from qualified lenders. You will have to be willing to give out your information online. Try a service such as https://www.bills.com/homeloan/mortgage_... they have a separate section to get quotes for refinance loans. You may be matched with up to 4 lenders, who will call you to discuss your options. The service is free to use. Also check on www.bankrate.com for the current interest rates for a refinance loan to get an idea.

1. In the classical case, (A) the fiscal policy multiplier is zero (B)crowding out cannot occur?

C)investment does not respond to interest rate changes

D)an increase in the income tax rate cannot lower the budget deficit

E)monetary policy is totally ineffective

2. Which of the following describes a part of the transmission mechanism?

A)a change in real money balances causes a portfolio disequilibrium and asset holders%26#039; reactions influence interest rates

B)an income tax rate cut stimulates private spending but the resulting interest rate increase dampens the income expansion

C)the Fed undertakes open market purchases and the resulting interest rate increase encourages people to save more

D)an increase in government spending is partially offset by the crowding out of private investment

E)both B) and D)

3. If the bank pays you a nominal interest rate of 2.5% on your savings and the rate of inflation is 4%, what is the real rate of return on your savings?

A)+6.5%

B)+2.5%

C)+1.5%

D)-1.5%

E)-4.0%

1. In the classical case, (A) the fiscal policy multiplier is zero (B)crowding out cannot occur?fha loan

1 - b

2 - c

3 - d

I hope this isn%26#039;t for a grade.

:-)

Finance Question regarding investing, APR and EPR?- any help is appreciated?

Basima currently has $9,500 at an investment bank. She began investing 8 years ago at 6% Annual Percentage Rate (APR) or quoted rate. About 2 years ago, Basima began her full-time employment and could have contributed a lumpsum amount of $2,300 at the end of year 7 and another lumpsum amount of $3,200 at the end of year 8.

a) How much did Basima invest in this account 8 years ago? (show timeline)

b) If Basima actually contributed those 2 lumpsum amounts at the end of year 7 and 8, what would have been the current value of her account today? (show timeline)

c) Going forward from today, Basima will earn 8% APR for the next 4 years. What is the future value of her investment if her account is currently worth $9,500? (show timeline)

e) Another local investment bank has offered her an interest rate of 10% APR compounded monthly. Calculate the Effective Annual Rate (EAR) and the Effective Periodic Rate (EPR) if Basima were to invest

Finance Question regarding investing, APR and EPR?- any help is appreciated?cheap loans

OK I don%26#039;t have my Finance Calculator with me right now (if I remember I will comeback and answer it.) But to figure it out all you need to do is

a.) put in FV=$9,500, (I) 6% and (N or time) of 8 years then press PV for present value and it will tell you how much she started with.

time line will look something like this.

1-------2-------3-------4-------

5------6-------7------8

8 will = $9,500 1 will = PV answer from above, 2-7 will be the interest on the PV from 1

b.) To find this answer on the time line 1-6 will be the same

for 7 put in the interest for that year plus add her payment of $2,300 which will not get any interest because it is at the end of the year. Then calculate the interest on that for year 8 and add to it the deposit of $3,200 w/ no interest because its at year end. That will give you the balance at year 8 (or today)

c.) is easy just put in PV=9,500,I=8%, N=4 then press FV for the answer.

For e.) I am not to sure I do now that you need to change your calulator from Intrest Compounded daily to compunded monthly.

I hope this helps

OK here you go

a.) = $5885.48

b.) = $15,141.87

c.)= $13,068.83

all of these number are intrest compounded monthly. So at 6% that would be .50 monthly or 6/12

I hope this is right it has been a while

I want to know what are the banks in the dominican republic offer.?

i am moving to the dominican republic and i want to deposit a 100000 us dollars on a one month money certificate, what kind of a interest rate would i expect from a local bank to receive?

I want to know what are the banks in the dominican republic offer.?consolidation loans

There are many good banks in the D.R. I would recommend two banks. Asocacion Popular and Banco de Reservas. These have been strong, safe banks for many years. You can expect a 9% APR for a one month CD. You can get a higher APR by converting your dollars to pesos, but I would recommend keeping your money in dollars.

I have an adjustable HELOC, now that rates have dropped, when should I see the change on mine?

I just checked my banks website and I%26#039;m still running at a high rate. Does it only adjust after my next payment cycle? they are offering a fixed option for a full point and a half less but I can%26#039;t see why they would offer that unless they expect my adjustable to go even lower in the short term. Is it time to go to a new bank or wait and see if my own rate is lowered given the market?

I have an adjustable HELOC, now that rates have dropped, when should I see the change on mine?student loans company

i have had HELOCs that adjusted daily, HELOCs that adjusted monthly, and HELOCs that adjusted quarterly. It just depends on what is specified in your loan agreement.

I have an adjustable HELOC, now that rates have dropped, when should I see the change on mine? loan

It can take up to 2-3months, and it%26#039;s up to your bank to even change it.

Some banks change it in the next pay period.|||Roll the whole thing into a 30 year fixed now that the rates are low. If you qualify you can get conforming rates under 6%|||Whether or not your HELOC will adjust downwards will depend upon the index that it%26#039;s linked to. If the index it%26#039;s linked to goes up, so will the rate on your HELOC. Most are not tied to the prime rate, but some other index such as the LIBOR.|||This depends on the lending institution and what index they are linking the interest rate to. Your lending institution should be able to advise you when (if?) your interest rate will come down. It may be wise to lock in at the lower rate, depending on what you are paying now.

Finance Question regarding investing, APR and EPR?