A borrower takes a $100,000 fixed-rate mortgage for 30 years at 4% interest. Using the standard amortization formula and rounding to the nearest dollar, what is the monthly principal-and-interest payment?
Correct Answer
A) $477
Using the standard amortization formula with principal of $100,000, monthly rate of 4% ÷ 12, and 360 monthly payments gives a monthly principal-and-interest payment of about $477. Rounded to the nearest whole dollar, the payment is $477.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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