## anonymous one year ago can someone please check my work on mortgage?

1. anonymous

Okay.

2. anonymous

3. anonymous

4. anonymous

@jim_thompson5910

5. anonymous

@karatechopper @mathmate @misssunshinexxoxo

6. jim_thompson5910

first two look good so far

7. jim_thompson5910

question 3 is incorrect

8. anonymous

how would i solve that one

9. jim_thompson5910

what is 1.5% of that mortgage?

10. anonymous

multiply?

11. jim_thompson5910

yeah 0.015 with the mortgage amount

12. jim_thompson5910

1.5% =0.015

13. anonymous

of what?

14. jim_thompson5910

the $197,000 mortgage 15. anonymous which is 295000 16. anonymous 2955 17. jim_thompson5910 add that onto 2000 18. jim_thompson5910 since it says "A mortgage broker charges$2000 plus 1.5% of the mortgage amount"

19. anonymous

4955

20. anonymous

right @jim_thompson5910

21. jim_thompson5910

yes

22. anonymous

anything else that was wrong @jim_thompson5910

23. jim_thompson5910

there are some here you didn't answer

24. anonymous

which ones

25. jim_thompson5910

like "A mortgage is in the amount of $600,000. The origination fee is 0.5%, the intangible tax is 0.2%, and there are 1.5 discount points" 26. jim_thompson5910 and "Sherri attempts to determine the total cost of a$500,000 ARM which starts at 6% by predicting the monthly payments. Her predictions are shown in the table"

27. anonymous

is that it or is there more

28. jim_thompson5910

there are more basically where you didn't highlight the answer in yellow

29. jim_thompson5910

I'll be right back

30. anonymous

yeah that is my answer the ones i highlighted @jim_thompson5910

31. anonymous

are you still checking it @jim_thompson5910

32. anonymous

yes no maybe? @jim_thompson5910

33. jim_thompson5910

yes I'm still checking

34. jim_thompson5910

the one with "What is the amount of the balloon payment rounded to the nearest dollar?" is incorrect where you picked $192,063 35. anonymous ok how can i fix that 36. jim_thompson5910 37. jim_thompson5910 type in the given mortgage amount (200,000) interest rate (7%) time (15 years) then scroll to June 2019 38. jim_thompson5910 look in the last column 39. anonymous 165,163.53? 40. jim_thompson5910 which rounds to 165,164 41. anonymous anything else that is wrong? 42. anonymous @jim_thompson5910 43. jim_thompson5910 "Julie is buying a house for$225,000. She obtains a mortgage in the amount of $156,000 at a 4.5% fixed rate. The bank offers a 4.25% interest rate if Julie pays 2.25 points. What is the cost of points for this mortgage rounded to the nearest dollar?" that one is wrong as well 44. jim_thompson5910 take 1% of the mortgage, then multiply by 2.25 45. anonymous 1% of 156,000 46. jim_thompson5910 yeah 47. anonymous 3510 48. anonymous any more? 49. anonymous what about the hank and caesar one? 50. jim_thompson5910 I'm looking at the ones you answered. I'm onto the last one 51. anonymous i answered both hank and caesar? 52. anonymous ????? 53. jim_thompson5910 you didn't mark the answer 54. jim_thompson5910 some of the questions weren't marked 55. anonymous can you tell me the ones i didn't mark @jim_thompson5910 56. jim_thompson5910 the question "What is the break-even point for the loans?" has the correct answer that you marked (10 years) 57. jim_thompson5910 the other stuff is unmarked, so I'll let you do that part. 58. anonymous which questions tell me the beginning of the question 59. jim_thompson5910 it's in the doc file. There are a lot that weren't marked 60. anonymous what do you mean without the highlighter? 61. jim_thompson5910 yeah 62. jim_thompson5910 there are no yellow highlights 63. anonymous let me highlight them then 64. anonymous 65. anonymous i fixed it @jim_thompson5910 66. jim_thompson5910 ok let me check 67. jim_thompson5910 this one is incorrect A mortgage is in the amount of$600,000. The origination fee is 0.5%, the intangible tax is 0.2%, and there are 1.5 discount points.  Which of the following is the total cost of the origination fee, the intangible tax, and the discount points?

68. anonymous

ok how can i fix it

69. jim_thompson5910

take 0.5% of the mortgage to get x take 0.2% of the mortgage to get y take 1% of the mortgage, multiply it by 1.5 to get z add x+y+z

70. anonymous

i got 10200

71. anonymous

wait wait

72. anonymous

its 13200

73. anonymous

right?

74. jim_thompson5910

yep

75. jim_thompson5910

Sherri attempts to determine the total cost of a $500,000 ARM which starts at 6% by predicting the monthly payments. Her predictions are shown in the table.  is incorrect 76. jim_thompson5910 I'm not sure how you got that 77. anonymous how would i fix it 78. jim_thompson5910$2997.75 per month for 5 years $2858.27 per month for 15 years$3093.85 per month for 10 years add up all that

79. anonymous

multiply each one right?

80. jim_thompson5910

yeah and keep in mind 12 months = 1 year

81. anonymous

so multiply the years by 12?

82. anonymous

83. anonymous

@jim_thompson5910

84. jim_thompson5910

yes to convert to months

85. anonymous

so then for example i multiply 60 * 2997.75 or add the two

86. jim_thompson5910

yeah do that for the three lines, then add the results

87. anonymous

so i multiply them

88. jim_thompson5910

89. anonymous

i got it. anything else that is wrong?

90. jim_thompson5910

91. anonymous

1065615.6

92. jim_thompson5910

good

93. jim_thompson5910

Jackie obtains a 30-year 4/2 ARM at 5% with a 4/7 cap structure in the amount of $313,500. What is the monthly payment during the initial period? is wrong 94. jim_thompson5910 Use the formula $\Large M = \frac{L*i}{1-(1+i)^{-n}}$ L = 313,500 i = 0.05/12 = 0.00416666666667 n = 30*12 = 360 95. anonymous -n? 96. jim_thompson5910 yeah the exponent is -n 97. anonymous i got 1682.94 98. anonymous right @jim_thompson5910 99. jim_thompson5910 i got the same 100. anonymous anything else thats wrong? 101. anonymous @jim_thompson5910 102. jim_thompson5910 still checking 103. jim_thompson5910 why did you pick$192,063 again? we already went over that one

104. jim_thompson5910

the one with the balloon mortgage

105. anonymous

yeah we did

106. jim_thompson5910

so be sure to fix that as well

107. jim_thompson5910

Mabel has a 15 year adjustable rate mortgage with a fixed rate for the first 4 years. In the 5th year, the interest rate rises to 5.8%. The remaining balance at the end of the 4th years is $231,975.40. What is the monthly payment in the 5th year? Use $\Large M = \frac{L*i}{1-(1+i)^{-n}}$ L = 231,975.40 i = 0.058/12 = 0.004833 n = 11*12 = 132 108. anonymous is it 2381.2632443602311616 109. jim_thompson5910 more like 2381.310317 110. jim_thompson5910 but close enough 111. anonymous what about the question with hank and caesar 112. jim_thompson5910 the one with hank, where you picked 570,702, is correct 113. anonymous ceasar? 114. anonymous caesar? 115. anonymous that one i know is wrong 116. jim_thompson5910 not sure yet 117. jim_thompson5910 they pulled a mean trick on that one 118. jim_thompson5910 instead of 0.5% the origination fee is 1% 119. anonymous so what do i do 120. jim_thompson5910 but you got the right answer (by randomly guessing? lol) 1.75*0.01*110500+2.0*0.01*110500 = 4,143.75 121. anonymous lol yay 122. anonymous check bradley 123. anonymous and the last three of the questions 124. jim_thompson5910 the Bradley one is correct 125. anonymous the mortgage one? 126. anonymous ??? 127. jim_thompson5910 see attached 128. anonymous i will solve it check the next 2 129. anonymous i got 3,455.20 130. anonymous what about the last 2 131. anonymous @jim_thompson5910 132. jim_thompson5910 3,455.20 is correct for that one 133. jim_thompson5910 did you guess on the last 2 as well? 134. jim_thompson5910 they are correct 135. anonymous thank you @jim_thompson5910 136. anonymous can you answer one last question for me? 137. anonymous Why it is necessary to prorate expenses? Explain in complete sentences. @jim_thompson5910 138. jim_thompson5910 tell me what you think 139. anonymous i am not sure @jim_thompson5910 140. jim_thompson5910 what does prorate mean? any idea? 141. anonymous to disribute money evenly 142. jim_thompson5910 so what do they mean when they say "prorate expenses" ? 143. jim_thompson5910 you're on the right track 144. anonymous to distibute such expenses evenly 145. jim_thompson5910 so why is it necessary to do that? 146. anonymous so that the expenses are not being recieved unevenly which could cause discrepsy and issues in a possible bank account 147. anonymous ??? 148. jim_thompson5910 Let's say that it costs$100 in property tax for a certain month (say June) If person A is selling the house to person B, and the house is fully sold on June 10th, is it fair for person A to pay all of the $100 tax for the full month of June? 149. anonymous no bc he he already sold the property 150. jim_thompson5910 so it's more fair to have person A pay 10/30 = 1/3 of the$100 tax bill and have person B pay 20/30 = 2/3 of the bill

151. jim_thompson5910

that's one example of prorating expenses

152. anonymous

so what does this imply like by definition

153. jim_thompson5910

mortgage insurance is another item that's prorated

154. jim_thompson5910

like you said: to split up the costs fairly

155. jim_thompson5910

and the split is based on how long the person has possession of the property

156. anonymous

oh ok

157. jim_thompson5910

the split would be 50/50 if person A had the property for the first 15 days, and person B had it for the rest of the 15 days