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Question
Mr. Fisher has built several houses and is offering buyers mortgage rates of 10% with a 15 year term. Current rates are 10.75%. Fourth National Bank will provide the loans, if Mr. Fisher pays an equivalent amount up front to buy down the interest rate. If a house is sold for $290,000 with a 90% loan, how much would Mr. Fisher have to pay to buy down the loan?
A) $1,957.50
B) $11,989.34
C) $11,250.25
D) $10,790.41
Answer
This answer is hidden. It contains 19 characters.
Related questions
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Using only the information in the table below, what would the IRR be for an investment that cost $500 in period 0 and was sold for $750 in period 5?
Present Value Factor for Reversion of $1 Period
6%
7%
8%
9%
10% 1
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.564474 A) Between 6% and 7%
B) Between 7% and 8%
C) Between 8% and 9%
D) Between 9% and 10%
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The future value compound factor given for period (n) at 15%:
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B) Would be greater than the factor given for period (n + 1) at 15%
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Q:
Your friend has a trust fund that will pay him $100,000 at the end of 10 years. Your friend, however, wants his money today. He promises to sign his trust fund over to you if you give him some money today. You require a 20% interest rate on money you lend to friends. How much would you be willing to lend under these terms?
A) $16,151
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The internal rate of return is the good feeling you get inside when you earn a return on your investment.
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The term to describe a piece of tangible personal property that is affixed to a property, such that it may be considered part of the property?
A) Cramdown
B) Workout
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A transaction in which a borrower sells a property for less than the current balance of the loan and then provides all of the proceeds to the sale to the lender, typically in full satisfaction of the loan.
A) Prepackaged bankruptcy
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Q:
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One difference between mortgage securities and corporate bonds is that mortgage securities tend to be "overcollateralized."
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C) Increasing the release price usually lowers the lender's risk
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Q:
Which of the following might impact the density of housing in a land development project?
A) The price paid for the land by the developer
B) The terrain of the land
C) The target market's preferences regarding density
D) All of the above
Q:
The land development industry is best characterized by which of the following statements?
A) The land development industry is dominated by relatively few national competitors
B) The land development industry is highly fragmented, localized, and extremely competitive
C) Land development and project development are synonymous
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Q:
Consider the feasibility study shown in the table. What is the return on total cost for the proposed project? Total sales revenue
$
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$
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$
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Income after deducting loss of rents due to vacancy and nonpayment of rents, as well as any concessions, is referred to as:
A) Potential gross income
B) Effective gross income
C) Net operating income
D) Before-tax cash flow
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Analysis of effective rents tends to be superior to analysis of total rents over the life of a lease.
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Financing costs are usually paid by the lender to either the borrower/buyer or the seller.
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General industry standards for a conventional loan specify a maximum LTV of 60 percent.