1. You purchase a $350,000 town home and you pay 25% down. You obtain a 30 year fixed rate mortgage with an annual interest rate of 6.25%. After 5 years you refinance the mortgage for 25 years at a 5% annual interest rate. After you refinance what is the new monthly payment?
2. You plan to purchase a $175,000 house using a 15-year mortgage obtained from your local bank. The mortgage rate offered to you is 7.75%. You will make a down payment of 20 percent of the purchase price.
(a) Calculate your monthly payments on this mortgage.
(b) Calculate the amount of interest and, separately, principal paid in the 60thpayment.
(c) Calculate the amount of interest and, separately, principal paid in the 180th(last) payment.
(d) Calculate the amount of interest paid over the life of this mortgage.