You work for an nationally charter bank and have been asked to project adjustable rate mortgage (ARM) payments over the life of a loan. Below is the loan's information:
15 year loan
Use the interest rates calculated in HW #3
| Loan |
|
Stripped T-Bond Price |
Forecasted |
|
Index |
Max |
Max |
|
Contract |
| Year |
Year |
Dollars |
Int Rate |
|
Forecast |
Periodic Cap |
Life Cap |
Index + margin |
Rate |
| 1 |
2014 |
100.000 |
0.13% |
|
2.13% |
|
|
4.63% |
3.00% |
| 2 |
2015 |
99.873 |
0.53% |
|
2.53% |
6.63% |
9.63% |
5.03% |
5.03% |
| 3 |
2016 |
99.348 |
2.18% |
|
4.18% |
7.03% |
9.63% |
6.68% |
6.68% |
| 4 |
2017 |
97.231 |
0.01% |
|
2.01% |
4.68% |
9.63% |
4.51% |
4.51% |
| 5 |
2018 |
97.219 |
2.61% |
|
4.61% |
6.51% |
9.63% |
7.11% |
6.51% |
| 6 |
2019 |
94.749 |
2.39% |
|
4.39% |
9.11% |
9.63% |
6.89% |
6.89% |
| 7 |
2015 |
92.539 |
3.71% |
|
5.71% |
8.89% |
9.63% |
8.21% |
8.21% |
| 8 |
2016 |
89.225 |
4.11% |
|
6.11% |
10.21% |
9.63% |
8.61% |
8.61% |
| 9 |
2017 |
85.699 |
6.18% |
|
8.18% |
10.61% |
9.63% |
10.68% |
9.63% |
| 10 |
2018 |
80.71 |
2.33% |
|
4.33% |
8.68% |
9.63% |
6.83% |
8.68% |
| 11 |
2019 |
78.876 |
8.92% |
|
10.92% |
8.83% |
9.63% |
13.42% |
8.83% |
| 12 |
2020 |
72.418 |
4.74% |
|
6.74% |
11.42% |
9.63% |
9.24% |
9.24% |
| 13 |
2021 |
69.139 |
4.68% |
|
6.68% |
7.24% |
9.63% |
9.18% |
9.18% |
| 14 |
2022 |
66.05 |
7.13% |
|
9.13% |
11.18% |
9.63% |
11.63% |
9.63% |
| 15 |
2023 |
61.654 |
2.43% |
|
4.43% |
9.63% |
9.63% |
6.93% |
9.63% |
$2,500,000 Property Value
80% LTV
No Points
No Fees
Calculate the following:
1) OLB (Beginning) for each month.
2) Payment (PMT) for each month.
3) Interest (INT) for each month.
4) Principal (PRIN) for each month.
5) OLB ( End) for each month.