Optional Homework Problems: Lecture 7

The selling price of home was $260,000. Justine made a down payment of 20% and borrowed the balance. She was able to negotiate a 3-year ARM with an initial teaser rate of 3.00% and subsequent annual rates equal to the current 90-day T-Bill rate on the loan’s anniversary date (October 1) plus 1.25%. The loan is for 30 years with caps of 2 and 6. ................
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