Your friend chose an ARM for the purchase of their new home. They would like to determine what the payment schedule will be. You decide to help and determine the following information to help you provide the answer. The contract rate is Prime - 0.75% where the current prime rate is 3.25%. The mortgage is a 15 year 1/1 ARM 3/2/5. Fees are $995 and there are no points. The purchase price of the home is $200,000 and the LTV of the mortgage is 80%. You expect that Prime will be
- 3.25% in Year 1
- 4.25% in Year 2
- 5.50% in Year 3
- 6.75% in Year 4
- 4.00% in Year 5
What is the monthly mortgage payment for each of the first 5 years?What is the amortization schedule for each of the first 5 years?