Robert is selling his home to his home to his good friend, Lisa. Robert is selling his waterfront multi-storey home for $2,950,000, and he will take back a mortgage for $1,350,000 at a contract rate of j2= 5.5%, with a 25-year amortization period, a 4 year term, and monthly payments up to the next higher $10.
a) The required monthly payment for this loan is?
$8,250
b) how much will Lisa owe Robert at the end of the 4 year term?
$1,235,956.02
c) lisa is considering another possible mortgage arranged through a mortgage broker. It will also have a face value of $1,350,000 with a contract rate of j2=5.5%, 25 year amortization period, 4 year term, and monthly payments rounded up to the next higher $10. However, the mortgage broker will take a brokerage fee of 3.5% of the loan's face valuewhich will be deducted from the face value of the loan. What effective annual interest rate will Lisa be paying on the funds advanced?
d) Assume that Lisa makes monthly payments of $8000 and has an outstanding balance after 4 years of $1249327.47. If the market rate for a similar mortgages is j2=7.75%, and lisa has made a down payment of $1,600,000, what is the market value of the offer?
Please help on C and D.
Thank you
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