| Need Help
I have a been stuck on 4 questions all week, I'm in the process of taking the broker exam I need help.
1) What is the effective cost of a PLAM with the features described below if the loan is repaid at the end of year 3?
- Loan amount of 295,000
- Mortgage term of 30 years
- Monthly Payments
- Current real rate of 3%
- annual Adjustments
- 2 discount points paid in cash by borrower at origination.
2) What is the contract rate during the third year of a 30 year ARM if the margin is 200 basis points, the annual adjustments rate cap is 200 basis points, the life-of-loan rate cap is 500 basis points, the initial period discount is 100 basis points, and the index rates are as fellows:
- at origination 1.8%
- at end of year one 3.2%
- at end of year two 5.4%
3) Bobby Joeis the borrower on a mortage loan that is exactly five years old today. The loan was originally for $235,000 at 7.5% annual interest for 30 years with monthly payments. He can refinance this loan by paying $8,240 in closing cost ( in Cash )and get a nrw loan for the remaining 25 year period with monthly payments at 6.75%. He plans to hold either loan to maturity. What is the net present value of refinancing this loan.
4) What is the balance at the end of year three of a RAM loan with an ultimate balance at the end of year 15 of $185,000.00 at 5.75% annually (Annual Payments).  | 
