1. Real Estate Loans

2.  Payment = (loan amount ÷ 1000) x table value  Use REAL ESTATE amortization table found on p. 498. Because this table lists the principal and interest per THOUSAND dollars borrowed, we have to divide the loan amount by $1000 before we multiply!

3.  A couple plans to borrow $220,000 for 30 years to purchase a home. Find both the payment and the total 30-year cost assuming (A) a 6.5% rate and (B) a 7.25% rate.

4.  A payment schedule is also known as an amortization schedule.  This schedule separates each payment into the portion going to interest and the portion going to the principal. (What goes to the principal is what reduces the debt!)

5.  After making a 20% down payment, a couple purchases a home using a mortgage of $155,000 at 6¾% for 20 years. First find the monthly payment, then prepare a loan repayment schedule for the first 3 months.

6.  AKA – impound accounts.  Used to prevent losses from unpaid taxes or insurance.  Homebuyer pays 1/12 of the total estimated tax and insurance each month. The lender holds this money until taxes and/or insurance is due and then pays that bill for the borrower.

7.  A 20-year mortgage is taken out with a debt of $147,000 and a rate of 6½%. Taxes are estimated to be $2400 per year, and a homeowner’s insurance policy costs $647 per year. Find the total monthly payment.