# Homework 2

Anonymous

Question description

### QUESTION 1

1. How much will their monthly property tax reserve cost?

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### QUESTION 2

1. How much will their monthly insurance reserve cost?

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### QUESTION 3

1. Calculate the monthly Principal & Interest payment for Loan 1

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### QUESTION 4

1. Calculate their monthly PITI for loan 1.

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### QUESTION 5

1. Calculate the monthly Principal & Interest payment for Loan 2

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### QUESTION 6

1. Calculate their monthly PITI for loan 2.

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### QUESTION 7

1. Calculate the monthly Principal & Interest payment for Loan 3

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### QUESTION 8

1. Calculate their monthly mortgage insurance payment for loan 3.

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### QUESTION 9

1. Calculate their monthly PITI + Mortgage Insurance for loan 3.

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### QUESTION 10

1. Calculate their housing ratio for Loan 1. Enter as Decimal amount. For Example 51.54% is 0.5154.

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### QUESTION 11

1. Calculate their total debt to income ratio for Loan 1

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### QUESTION 12

1. "If they take Loan 3, they will use the extra cash to pay off their student loans, so that payment goes away. Calculate their total debt to income ratio for Loan 3."

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### QUESTION 13

1. Calculate the total prepaid finance charges for Loan 1.

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### QUESTION 14

1. Calculate the total prepaid finance charges for Loan 2.

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### QUESTION 15

1. Calculate the total closing costs for Loan 2.

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### QUESTION 16

1. Calculate the total cash to close with Loan 2.

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### QUESTION 17

1. Calculate the total cash to close with Loan 3. Do not include the payoff of their student loans.

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### QUESTION 18

1. What is the APR for Loan 1? Enter the decimal amount. For Example 5.125% is 0.05125.

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### QUESTION 19

1. What is the Effective Borrowing Cost for Loan 1 if they pay it off with a refinance in year 5? Enter the decimal amount. For Example 5.125% is 0.05125.

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### QUESTION 20

1. What is the APR for Loan 2? Enter the decimal amount. For Example 5.125% is 0.05125.

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### QUESTION 21

1. What is the Effective Borrowing Cost for Loan 2 if they pay it off with a refinance in year 5? Enter the decimal amount. For Example 5.125% is 0.05125.

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### QUESTION 22

1.  Which loan has the lower effective cost to borrower for 5 years?
 A. Loan 1 B. Loan 2 C. Need more information D. I have no clue

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### QUESTION 23

1. What is their total monthly debt if they take Loan 2?

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### QUESTION 24

1. What is their total monthly debt if they take Loan 3? (Student loan is repaid for this option.)

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### QUESTION 25

1. What is the fully indexed rate of the ARM at origination? (Enter Decimal Amount. 7.5% would be 0.0750

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### QUESTION 26

1. What is the loan balance of the Adjustable Rate Mortgage [ARM] at the end of year 5?

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### QUESTION 27

1. What is the maximum interest rate for the ARM in year 6? Enter decimal amount.

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### QUESTION 28

1. Calculate the payment for year 6 for the ARM.

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