Assignment: Time Value of Money
1) Find 5 different online mortgage lenders, such as this one.
2) From these 5 lenders, find the following rates, assuming the mortgage payments are made monthly:
a. 10-year (if available) for fixed-rate mortgage
b. 15-year (if available) for fixed-rate mortgage
c. 30-year for fixed-rate mortgage
3) Convert these rates into effective annual rates (EARs).
4) Discuss which rate is actually the cheapest rate.
a. What are 2 things about the sample Web site given above that could be applicable to a consumer or investor?
b. Present the rates in a table. List the quoted rate and EAR rate, the lender, and the maturity of the loan. Show your work for each calculation.
c. What is 1 mistake people make when calculating their mortgage payments? Explain your answer.
d. Based solely on the EAR, which rate is the cheapest? Does this make sense?
e. Why do the different lenders have different rates?
f. Is the difference in rates going to make a huge impact on the cost to the homebuyer? Explain your answer.
Format your assignment according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.