Mortgage Amortization Schedule


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Mortgage Amortization Schedule


 

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Finance Problem - Mortgage Problem?
Consider the following: Your friends have been offered a 30-year mortgage by their financial institution. They had saved $750 at the beginning of every month for the last 5 1/2 years at a rate of 4%, compounded monthly. It is their firm desire to avoid a high ratio mortgage - this requires a minimum down payment of at least 20%. In the hope of keeping their monthly payment to a minimum, they originally had thought of taking a 35-year amortization. The rate for a 5-year term, fixed-rate mortgage is 3.65%. a) How much mortgage can the couple afford if they want a conventional mortgage? b) Draw up their mortgage amortization schedule for months 9, 10 and 11. c)If they chose a 20-year amortization period instead of a 35-year period, how much total interest would they save? d)Assume that after the 5-year term expires, they are able to apply $10,000 against the mortgage balance and decide to change to a weekly mortgage payment equal to 1/4 of their former monthly payment. By how much will these two factors reduce their amortization period? Assume they are still opting for a 35-year amortization period at the outset and that their quoted mortgage rate will not change.

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