What is the incremental cost of financing the marginal

Assignment Help Financial Management

Reference no: EM131859955

1. You plan on purchasing a house using a mortgage that will have an initial balance of $150,000. Your lender offers you three choices: a loan with a contract rate of 6.25% and 2.00 points, a loan with a contract rate of 6.5% and one point, or a loan with a contract rate of 6.85% and no points. If you plan on staying in the house for 10 years, what loan should you take?

2. Today you can get an 80% LTV loan on a $200,000 house at a contract rate of 6.85% with no points. You can get a 90% LTV loan on the same house at a contract rate of 7.25%. Assuming a 30 year mortgage, and that you will hold the loan for that entire 30 year period, what is the incremental cost of financing the marginal 10%? If you planned to prepay the loan after 10 years, what would be the incremental cost of financing the marginal 10%?

Reference no: EM131859955

Questions Cloud

What is the ppm defective for the given process : A courier company is analyzing the effectiveness of its package handling system. The average number of packages per customer is 3.35, and the courier recorded.

Should you refinance your mortgage : Today you can refinance into a 20 year mortgage at 6.85%, but it will cost you $3000 in transaction costs to do so. Should you refinance your mortgage?

Evaluate the source of supply for the company : The company requires you to have the part made to print and in inventory at our factory in 100 days at production volumes.

Describe the three types of project risk : Describe the three types of project risk. Which type is theoretically the most relevant? Why?

What is the incremental cost of financing the marginal : what is the incremental cost of financing the marginal 10%? If you planned to prepay the loan after 10 years,

What are the major staffing and human resource issues : Who comprise the target population being served by the various programs provided by your chosen facilities? What are the major staffing and human resource.

Out fixed rate mortgage : At some point in the past, you took out a fixed rate mortgage. What will the balance be on this loan after 5 more years have passed.

Determining the variance analysis for given problem : Create your own fictitious company and devise a budget. Be sure to include all assumptions possible but make it simple.

Create a hypothetical business with employees : Create a hypothetical business with approximately 50 to 100 employees. Place the employees in two or three departments. Assign to each department a title.

User Account

All Pages