Question

Five ARM questions!

Answer 1

Question 1 (Multiple Choice Worth 3 points)

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?

$1,696.24

$2,252.70

$2,572.92

$3,475.41

Question 2 (Multiple Choice Worth 3 points)

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?

$456,659.67

$481,013.90

$531,456.17

$506,961.20

Question 3 (Multiple Choice Worth 3 points)

Brad and Angela are purchasing a house with a 15-year, 3/1 ARM for $185,000 at 4.15% with a
2/10 cap structure. What will the difference in payments be from year 3 to year 4?

$48.30

$157.84

$437.35

$488.93

Question 4 (Multiple Choice Worth 3 points)

A bank advertises a 2/1 ARM at 3.25% with a 2/10 cap.

What is the maximum interest rate that can be charged during the fifth year?

2%

3.25%

9.25%

10%

Question 5 (Multiple Choice Worth 3 points)

Fiona is purchasing a condominium and is financing $305,000 with a 30-year 5/1 ARM at 4.65% with a 1/12 cap structure. What will her payments be at the beginning of year 6?

$1436.86

$1572.69

$1608.51

$1736.26

Answer 2

I can't answer now because I have to go back and brush up on my knowledge on finance.

Answer 3

Brad and angelina is not 488.93
Aimee and Ben is not 2410.52
I got these ones wrong