You need a 30 year fixed-rate mortgage to buy a new home


[Loan Payments] You need a 30 year, fixed-rate mortgage to buy a new home for $250,000. Your mortgage bank will lend you the money at a 5.3% APR for this 360-month loan. However, you can only afford monthly payments of $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $950?

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Financial Management: You need a 30 year fixed-rate mortgage to buy a new home
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